UNAUDITED FINANCIAL RESULTS

Robust infrastructure, resilience through innovation

For the half year ended 31 August 2015

Douglas MboweniChief Executive Officer

Roy ChimanikireChief Finance Officer

Strategic and operational overview Financial overview Outlook

Douglas MboweniChief Executive Officer

Operating environment

1. Operating environment

Regulatory

Technological

Competition

Economic• Increased use of social media

technologies resulting in lower voice

revenues

• Proliferation of new technologies

presents opportunity to grow broadband

business

• Continued company closures & Job

losses resulting in reduced disposable

incomes

• Erratic power supplies affecting

network operating costs

• Playing field is still not level with

competition being given unfair advantage

• NetOne & TelOne are reneging on

obligations to pay interconnect fees yet

they continue to compete on low tariffs

• Unwarranted regulatory interventions

negatively impacting ICT sector

• Continued engagement with regulator

expected to yield positive outcomes

Business model

2. Operating business Model

Key Stakeholders“Rules of the game”

Gross margin

Opex

Capex

Shareholder returns

Cash flow

Cost of Sales

Revenue

Profitability

Measures“How we measure our success”

Customer acquisition & value management

Business processes“How we deliver”

InnovationProduct lifecycle

mngt

Support processes

Customer Service

Network mngt

Infrastructure

Products & services

Internal & External partners

Strategy Licence to operate

Input elements“What we need to deliver“

Customers

Customers“Why we exist”

3. Building Blocks to EWZL Success

• Creativity & high performance• Competencies• Motivation• Integrity• Accountability• Operational excellence

• Reliability• High Capacity• Seamless processing and

increased automation• Security

• Customer centricity• Lower cost of doing business• Innovations• Efficiency• Exellence & Consistency

The business Units

The Organisation’s success

4. Translating Strategic Objectives Into Key Performance Indicators

KEY PERFORMANCE INDICATORSSTRATEGIC ALIGNMENT

Customer experience

• Network peformance• Call center

responsiveness• Accessibility of shops• Focus on value

Financial performance

• Revenue diversification

• Cost containment• Earnings growth

People & culture

• Performance management• Skills enhancment• Talent management

Organisational structure

• Workflow optimisation

• Capitalising on synergies

• Process automation

Innovations

• Collaboration among group companies

• Pipeline of new ideas• Commercialisation of

new ideas

Stakeholder management

• Implementation of engagement initiatives

• Stakeholder satisfication monitoring

• Consistant regulatory compliance

5. Market PresenceEnhancing customer experience

Over 35,000 individuals selling airtime recharge cards nationwide.

Over 250 branded shops, including containers to increase customer contact points.

Over 19,000 agents countrywide.Over 1,100 green kiosks countrywide.

Individual Entrepreneurs

BrandedShops

Dealer & AgentFootprint

4.9 million subscribers

695 thousand subscribers

682 thousand subscribers1.30 million subscribers

1.34 million subscribers

Health tips

6. Increased stickiness through overlay services

7. Product/service clusters Mobile & Connectivity mCommerce & eCommerce MFS, Remittances & Banking

Insurance Content Services

Western Union

MoneyGram

WorldRemit

Connected Lifestyle

ECOSUREFUNERAL (Diaspora)

ECOSUREAUTO

ECOSUREEDUCATION

ECOSUREHEALTH

M-COMMERCE

TENGAI CLASSIFIEDS

TENGAI LOGISTICS

B2B FULFILMENT

ECOCASH GROCER

TENGAI VENTURES

REMITTANCES

INFRASTRUCTURE

CONNECTEDHEALTH

Pay Merchant

(USSD)

Bill Payments

Tap & Pay (Micro)

MONEY TRANSFER

BILL PAYMENTS

MERCHANT SERVICES

ECOHEALTH

DIAL-a-DOC

ECOHEALTH TIPS

DISEASESURVEILLANCE

Operational highlights

Value share analysis

8. Subscriber GrowthContinued market leadership

Subscriber Growth

Econet, 72%

Telecel, 13%

NetOne, 15%

Source: Market Intelligence

• Revenue diversification has enabled broadband and overlay service revenue to mitigate against voice revenue decline

• According to POTRAZ, Econet market share of active subscribers increased in the first quarter while competitor market share dropped

9. EcoCashMomentum sustained

Customers (millions) Revenue contribution (%)

Aug 2013 Aug 2014 Aug 2015 Aug 2013 Aug 2014 Aug 2015

Transactions value USD (billions) Number of agents (thousands)

Aug 2013 Aug 2014 Aug 2015 Aug 2013 Aug 2014 Aug 2015

108%

24%

1.22.5 3.1

114%

40%

715 21

32%

3.7 4.92.1 23% 3

7 11

3.64.7

7.0

10. BroadbandSuccess of our broadband offering

• Continued fibre rollout• Over 8 000km of fibre rolled out• Fibre to the home product continues to

grow

Customers (millions) Revenue contribution (%)

31%

49%

Aug 2013 Aug 2014 Aug 2015

914

16

Aug 2013 Aug 2014 Aug 2015

• 4G/LTE network • First operator to launch 4G/LTE

network• Widest & smartest 4G/LTE coverage

Capital investment –Over US$1

billion invested in

the economy

Social transformation

-27 learning hubs

countrywide,980 teachers

trained in basic IT

Employment creation -

35,000 EcoCashagents,

1,100 Green Kiosks

Cutting edge innovation –

Dynamic product offerings

Infrastructure developments –

Improving communications,

technology, internet connectivity, roads

and power grids

Economic Contribution –US$1.15 billion paid in various taxes, duties

and levies since 2009

Financial inclusion –

EcoCash providing

financial services to previously excluded

communities

11. Stakeholder value proposition

Roy ChimanikireChief Finance Officer

Financial overview

12. Group Highlights Preserving value

Subscribers (m) EBITDA (US$m)Revenue (US$m)

Capex (US$m)Broadband Revenue (US$m)Econet Services Revenue (US$m)

U

Aug-14 Aug-15

9.0 9.2

Aug-14 Aug-15

392323

Aug-14 Aug-15

155 123

Aug-14 Aug-15

2836

Aug-14 Aug-15

80 46

Aug-14 Aug-15

56 52

Revenue diversification through innovation

13. Revenue

Revenue CompositionContribution to Total Revenue Trends

Revenue (US$m)

9%

10%

14% 13%16%

3%6% 7%

10% 11%

12%

16%

21%23%

27%

0%

10%

20%

30%

Aug-13 HY to Feb-14 Aug-14 HY to Feb-15 Aug-15

Data Overlay Services Total

Aug-13 HY to Feb-14 Aug-14 HY to Feb-15 Aug-15

6376 110

112118

Non-voice Revenue (Excl. SMS & Beverages) (US$m)

14. Broadband Revenue GrowthDriving data

• New packages were introduced to further segment the market

• Focus continues on a full broadband offering comprising:• Wi-fi

• Fibre-to-the-Home (FTTH)

• 4G/LTE development

• Fibre network development

Broadband contribution

$52m

16% of Revenue

• Smart phone penetration affected by the introduction of duties on handsets;

• Revenue increased by 8% between Q1 and Q2

Revenue (US$m)

Q3-FY15 Q4-FY15 Q1-FY16 Q2-FY16

22 24 25 27

EcoCash contributionRevenue (US$m)

Aug-14 Aug-15

2735

$35m

11% of Revenue

15. EcoCash Revenue GrowthSustained growth

• Person to Person transfers remains the most popular service

• Liquidity assistance provided to agents through Steward Bank

• Focus on:• Remittances• Agency channel• Liquidity• Merchant payments

• 26% increase in the transaction volumes• 24% increase in transaction values from last

half year period• 23% of airtime sales through EcoCash

16. Total Costs

Total Costs (US$m)

Aug-14 Aug-15

250 212

Total Costs (US$m)

• Implementation of• 15% reduction in all supply side costs

• 20% reduction in employee costs

• Airtime commissions reduced by about 1%

• EcoCash commission structure reviewed

• 17% network costs reduction

• Full impact of current cost reduction will berealised in FY2017

GeneralAdmin.

Network Computercosts

EmployeeBenefits

EcoCashCommissions

Marketing,Sales &

Distribution

Direct Costs

27

62

10

47

17 22

65

28

53

10

30 20 17

53

Aug-14 Aug-15

Margin preservation through cost optimisation

17. EBITDA Margins

EBITDA (US$m) EBITDA Margin

Aug-14 HY to Feb-15 Aug-15

40% 37% 38%

Aug-14 HY to Feb-15 Aug-15

155131 123

• EBITDA margin improvement due to cost reduction measures

EBITDA affected by external factors

• Decline in EBITDA largely due to voice revenue decline

• Impact of voice tariff reductions for the current period were for full 6 months compared to 2 months in the preceding half year period

18. Depreciation and Amortisation

Depreciation & Amortisation (US$m)

Aug-14 Aug-15

60 65

• Relatively modest increase in

depreciation charge consistent with

reduced Capex spend

Depn & Amort./Asset Base (%)

Aug-14 Aug-15

6.4% 7.0%

• Depreciation charge now stabilizing

• Amortisation of the operating

licence is reflected in the figures

above

Reflection of high Capex intensity past hyperinflation

19. Profit After Tax

• Focus on profit improvements

through cost management and

revenue optimisation

• The impact of the cost rationalization

efforts has not yet been fully reflected

in the current profit levels

Positive value

PAT (%)

Aug-14 HY to Feb-15 Aug-15

13%6% 7%

PAT (US$m)

Aug-14 HY to Feb-15 Aug-15

5020 24

Investing for the future

20. Capital Investment

CAPEX (US$m) CAPEX/REVENUE (%)

Aug-14 Aug-15

20% 14%

Aug-14 Aug-15

8046

• Capex investment in the period largely focused on:

• Network modernization to a full IP Core network

• 4G/LTE deployment

• 3G capacity and coverage

• Improving IT backbone and data warehouse capabilities

• Reduction in Capex mainly due to:• Specific focused add on investment

on already robust infrastructure• Relatively lower amounts compared

to significant post hyperinflation investment

21. Cash GenerationPositive cash flow generation

• The cash flow generating ability of the business remains sound despite the decline in revenues

Cash flow From Operations (US$m)

Aug-13 Aug-14 Aug-15

186117 121

Cash Outflow From Investing Activities (US$m)

Aug-13 Aug-14 Aug-15

178105

53

22. BorrowingsBalancing debt/CAPEX requirements

Debt to Equity (%)Debt Evolution (US$m)

Aug-14 Feb-15 Aug-15

255 242 220

Aug-14 Feb-15 Aug-15

37% 36% 33%

Net Interest Expense (US$m)

Aug-14 Aug-15

17 19

• Improved debt/equity ratio reflecting a stronger balance sheet position

• Debt repayments of US$32.8 million made in the half year period

PROFITABILITY

• Product innovation

• Cost optimisation

• Process efficiency

CASHFLOW

• Working capital

management

• Capex intensity

FINANCIAL POSITION

• Debt repayment

• Maximising synergies

among various

investments

23. In conclusion

Outlook

Continued diversification of revenue streams and introduction of products that appeal to all segments of our customer base

Aggressive review of each cost item in the business

Limiting Capex to key growth areas in light of deflation and economic factors

Re-alignment of the business in order to enhance operational efficiency

Continuous engagement with key stakeholders in Government to ensure sector sustainability

24. Strategic response

25. Strategic focus

Customer

centricity

Customer engagement

Segment specific products

Operational efficiency

Cost reduction

Organisationalre-alignment

Market

Leadership

Continuous innovation

Expand Coverage & Maintain

Quality

Talent

Management

Staff engagement

Ensure skills and knowledge

remain up to date

Regulatory

Compliance

Ensure Continued Compliance

Continuous dialogue with

regulators

Appendices

26. Statement of Comprehensive IncomeUS$ 000's Aug-15 Aug-14 Variance (%)

Revenue 323,001 392,342 -18%

EBITDA 122,535 154,976 -21%

Depreciation, amortisation

& impairment (64,665) (60,403) -7%

Operating profit 57,870 94,573 -39%

Net finance costs (19,314) (17,031) -13%

Profit before tax 38,555 77,542 -50%

Income tax expense (14,747) (27,923) 47%

Profit after tax 23,808 49,619 -52%

Non-controlling interests 304 340 11%

Attributable profit 24,112 49,959 -52%

EBITDA Margin 38% 39% -1%

PAT Margin 7% 13% -5%

27. Statement of Financial Position US$ 000's Aug-15 Aug-14 Variance (%)

ASSETS

Property, plant & equipment 864,171 904,386 -4%

Other non-current assets 123,504 66,611 85%

Current assets 256,349 296,515 -14%

TOTAL ASSETS 1,244,024 1,267,512 -2%

EQUITY & LIABILITIES

Share capital 40,765 40,741 0%

Other reserves 4,305 1,702 153%

Retained earnings 612,240 622,907 -2%

Minority interest 4,221 3,584 18%

Total Equity 661,531 668,934 -1%

Long term interest-bearing liabilities 143,483 147,515 -3%

Deferred taxation 114,283 113,477 1%

Current liabilities 324,727 337,586 -4%

Total Liabilities 582,493 598,578 -3%

TOTAL EQUITY & LIABILITIES 1,244,024 1,267,512 -2%

28. Statement of Cash FlowsUS$ 000's Aug-15 Aug-14 Variance (%)

Cash generated from operations 134,188 150,325 -11%

Tax paid (12,706) (33,369) 62%

Net cash from operating activities 121,482 116,956 4%

Acquisition of property, plant and

equipment & Intangibles (45,650) (80,013) 43%

Other investing activities (7,840) (25,033) -69%

Cash used in investing activities (53,490) (105,046) 49%

Cash used in financing activities (63,451) 11,242 664%

(Decrease)/Increase in cash & cash

equivalents 4,541 23,152 80%

Cash and cash equivalents at the

beginning of year 95,239 71,331 34%

Cash & cash equivalents at the end

of the year 99,780 94,483 6%

Thank you