mtn group limited final audited...
TRANSCRIPT
Final audited results f d d 31 D b 2010
MTN Group Limited
for year ended 31 December 2010
Agenda
S i d i l iStrategic and operational overview
Phuthuma Nhleko
Group President and CEO
Financial overview
N i P t lNazir Patel
Group Finance Director
Message from the MTN Group Chairman
Cyril Ramaphosa
Looking ahead
Sifiso Dabengwa
Group COO and CEO designate
Phuthuma Nhlekod d
Strategic and operational overview
Group President and CEO
MTN vision
To be the leader in telecommunications in emerging markets
Convergence & Leverage existing footprint & intellectual Consolidation &
operational evolution footprint & intellectual capacity diversification
Increased competitiveness
P t V l H b d Skill P t V l H b d Skill
Execution excellenceExecution excellence
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
Medium term considerations- market opportunities market opportunities
• Africa seen as the last frontier of growth
Attractiveness and challenges• Africa seen as the last frontier of growth
• ME opportunities often focused on oil and property
• Resources remain important, but Africa is slowly diversifying, with over 60% of growth coming from non-traditional sectors – retail manufacturing financial services telecoms real coming from non traditional sectors retail, manufacturing, financial services, telecoms, real estate, tourism etc
• Geo-political risks (events in North Africa and the Middle East)
• Doing business in emerging markets requires a long-term commitment and a steady hand as
Interesting facts
Doing business in emerging markets requires a long term commitment and a steady hand as risks may appear overwhelming at times
• As most economies contracted during recession, Africa’s GDP expanded by 2% in 2009, while GDP dropped 4% in the US, 2.8% in the EU and 1.5% in Latin America
• Emerging markets out paced the developed markets with GDP growth of at least 6% d t l b l GDP th f b t 2 5% l di th “ h d i ”compared to global GDP growth of about 2.5% excluding the “shadow economies”
• Urbanisation: 40% of Africans live in the cities (67% or 1 billion by 2050, creating economies of conglomeration. 52 cities in Africa have over 1 million people, and growing
• Africa entering a ‘take off’ phase due largely to a positive mix of socio political and economic • Africa entering a ‘take-off’ phase, due largely to a positive mix of socio-political and economic forces (Democracy, fiscal discipline)
• FDI in Africa has increased from USD15 billion to USD 80 billion in 8 years
Group highlights
Group subscribersU 22 0% t
EBITDA marginU 2 9% i t t
Approximate FCF U 108% tUp 22,0% to
141,6 millionUp 2,9% points to
44,0%Up 108% to
ZAR 31,0 billion
Adjusted HEPSUp 20,5% to
Final dividendper share of
Net cashof
909,1 centsp349 cents ZAR 905 million
Dividend payout ratio increased to 55%
Impact on financial framework
Cost efficienciesContinued organic Capex spend Cost efficienciesgrowth “peaked” Cost efficiencies
Final dividend
per share of349 cents
Final dividend
per share of349 cents
Shareholdert 349 cents 349 cents returns
OpportunisticM&A
Increased cash generation
M&A
Revenue growth
127.3 • Underpinned by subscriber growth
• Negatively impacted by strong rand
Revenue growth ZAR (billion)
111.9
114.7
Negatively impacted by strong rand
• Regulation of termination rates in SA and Nigeria resulted in a decline in revenue
Rev (constant currency
Rev (reported)
• Significant increase in data revenue, albeit off a low base
2,5%
14%
2009 2010
Rev (reported)
Proportionate subscribers Total subscribers
Dec-09 Dec-10
26% 26%
88.5 106.9
20,8%
(million) (million)
116.0 141.6
32%32% 22%
47%
26%
47%
,
46%45%
22%23%
Dec-09 Dec-10
27% 27%
Dec-09 Dec-10
SEA WECA MENA
22%23%
Key revenue drivers
3 638 25%4 000
• Introduction of new commercial and innovation function to drive data products and services
Data and SMS revenueZAR (billion)
3 638
2 490
1 633
19%
5%
20%
11%15%
20%
25%
2 000
2 500
3 000
3 500
4 000 services
• Distribution of data devices (smartphones and other related products)
538109 178 297
1 009
288 447
5% 7%
0%
5%
10%
0
500
1 000
1 500
South Nigeria Ghana Iran Syria
• Data opportunity (other than SMS) still immature outside of SA
• Investments and upgrades of network and IT i f t t i l di 3G d WIMAXSouth
AfricaNigeria Ghana Iran
(49%)Syria
Data ZAR '000 SMS ZAR '000
Data (incl SMS) as % of rev
infrastructure including 3G and WIMAX
• Investments in undersea cables implemented – EASSY (Aug 10), EIG (partly, Feb 10)
Mobile money customers• Mobile money
• 4,3 million customers (Dec 10) 120231 16
Mobile money customers(‘000)
• Launched in 11 countries to date1 403
1 838
691
South Africa Uganda Ghana Cote d' Ivoire Rwanda Benin
EBITDA and key drivers
• Cost containment initiatives on opex and staff costs
56.760
EBITDA growth ZAR (billion)
• Decreased selling, distribution and marketing costs
• Decrease in interconnect cost
46.1 50.5
30
40
50
23%
• Supply chain management
• Increased centralisation of procurement activities and rationalisation of suppliers10
20
30
EBITDA (constant currency
EBITDA (reported)
9,7%
• Infrastructure sharing
• Strategy pursue passive infrastructure sharing considering circumstances of each market
MTN Gh t h i j i t t ith
0
2009 2010
(reported)
EBITDA margin(%)
Dec-09 Dec-10
• MTN Ghana tower sharing joint venture with ATC established
• Structural framework for
• Shared services and outsourcing34 2%
44.0%
32.0%
41.1%
SEA
Group
• Shared services and outsourcing
• Standardisation and optimisation of systems and processes
55.5%
34.2%
53.5%WECA
33.6%26.9%MENA
Dec-09 Dec-10
Regulatory
Si d MOU i S i f th i f th BOT t f h ld li
Market regulation
Infrastructure sharing
• Signed MOU in Syria for the conversion of the BOT to a freehold licence• Discussions on terms ongoing• Expected terms : effective date Apr 11, 20 year GSM licence, upfront fee of ± SYP 25 bn and
between 25% and 27% rev share• Evidence of some regulatory preference for a tariff floor to ensure sustainability and long term Evidence of some regulatory preference for a tariff floor to ensure sustainability and long term
commercial success of the telecommunications sector
Mobile termination rates• South Africa
• Final regulation published 29 Oct 10, • First reduction Mar 10 and further cuts in Mar 11, Mar 12 and Mar 13 to 40c/minNi i
Mobile termination rates
SIM registration
• Nigeria• Implemented 31 Dec 09
• South Africa• 81% of prepaid and 71% of postpaid base RICA’d (Dec 10)• Deadline extended to 30 Jun 11Ni i 34% f b i d l i d di i ll l i SIMS
SIM registration
• Nigeria : 34% of base registered, regulator issued directive to sell partly active new SIMS from 14 Feb 11
• Ghana : 70% of base registered, existing SIMS to be registered by Jun 11
Other key developments
MTN A d
People/sustainability
• MTN Academy• Delivers focused learning services and solutions to meet key talent and critical
skills needs• Reached over 25 000 employees over 3 years (classroom and e-learning)• Reached over 25 000 employees over 3 years (classroom and e-learning)• Effective talent retention strategies incl. job rotation and special assignment
projects • Greening operations g p
• Energy efficiency and environmentally-friendly energy investments to reduce opex, carbon tax risk and greenhouse gas emissions, incl. e-waste management
• Carbon footprint initiatives to identify regulatory, physical and other risks and
kh l
opportunities posed to MTN by climate change and improve business efficiencies • Social and economic development projects through MTN Foundations across ops
• Achieved MTN SA’s objectives in creating a broad-based empowerment transaction• Holds 4% of MTN Group
BEE – MTN Zakhele
• 80,900,000 MTN Zakhele shares offered to members of the Black public• Allocated shares to 120,349 individuals and 2,203 groups
Operational framework
Quality service
AL
IN
Efficient distribution
Brand preferenceN
AN
T
Customer ExperienceE
RE
R
pe e ce
SegmentationProducts and value added
servicesXT
NA
Experienced people
services
EX
AL
people
South Africaoperational highlightsoperational highlights
Launched Jun 1994 Market share 36% Population 50.2m Market sizing 63m (2015) Penetration 105% Shareholding 100%
Subscribers • Subs growth driven by prepaid segment
• MTN Zone Mahala4Life
• Prepaid retail data promo’s
Subscribers(’000)
14,79917,169 16,067
18,842
• Marginal postpaid growth
• Growth in hybrid subs; +57%
• Decrease classic subs; –5%
12 30614 415 13 044
15 477
;
• Stabilised network and billing systems
• Optimised branded distribution footprint
• Customer experience
2 493 2 754 3 023 3,365
Dec-07 Dec-08 Dec-09 Dec-10
PrepaidPostpaid
Net additions2 775 • Customer experience
• Strategic locations
• Brand preference improvement1 198 1 579
1740
(’000)2,144
2,3702,775
• FIFA 2010 Soccer World Cup
• Decreased churn946 791
62
1,035
-1 164
Dec-07 Dec-08 Dec-09 Dec-10
H2 H1
-1,102
South Africa- operational highlights
• Increased prepaid ARPU
• Larger % of rev generating subs in reported
operational highlights
ARPUZAR
g g g pbase
• Increased data revenue
• Declining postpaid ARPU
396 403365
329
• Lower out-of-bundle usage
• Growth in hybrid and telemetry base
• Initial impact of MTR cut
149 148 145 152
112
Postpaid
Blended • Initial impact of MTR cut
• Revenue and cost decline
• Increased on-net traffic positive for margin
92 97 100 112
Dec-07 Dec-08 Dec-09 Dec-10
Prepaid
A t t l MOU Avg. total MOU comprises both incoming andoutgoing minutes
106 102 100 107
Outgoing MOU 65 64 64 71
South Africa- infrastructure and data highlights
• 369 2G and 284 3G BTS’s added
• 49% 3G population coverage
infrastructure and data highlights
CapexZAR (million) 6,034
1 549
3 096
3 034
2 894
p p g
• Expansion and modernisation of 3G and data core network for increased capacity
• Migration of various voice interfaces to IP 2,843
4,8683,908
1 294 1 7723 000
1 014
1 549
Dec-07 Dec-08 Dec-09 Dec-10
H2 H1
gbased for increased bandwidth
• Fibre deployment
• Ongoing deployment of national long distance, behind schedule
• Continued high data growth
• 9.2m packet data users (49% of base)Data revenue
Capex as % of revenue 10.1 15.0 18.2 11.0
2 444
3 209
2,7563,596
4,496
6,128 • 1.6m Smartphones
• 946k modems (incl modules and USB dongles)
• Data product drive
ZAR (million)
1 221 1 696 2 0522 919
1 5351 900
2 444
Dec 07 Dec 08 Dec 09 Dec 10H2 H1
2,756 p
• Business Solutions remains challenging
• Rev up 11%
• Maintained margin Dec-07 Dec-08 Dec-09 Dec-10 • Maintained margin
• 40% cut in fixed-line data tariffsAs % of SA revenue (excl. Handsets,
incl. SMS)11.0 12.4 14.8 19.0
Nigeria- operational highlights
Launched Aug 2001 Market share 52% Population 152m Market sizing 117m (2015) Penetration 49% Shareholding 76%*
operational highlights
Subscribers (‘000)
23 077
30 827
38,669• Increased market share
• Attractive segmented value propositions
• Quality network
Subscribers ( 000)/ARPU ($)
16 511
MTN Subscribers ('000)ARPU (USD)
• Effective churn management
• Aggressive competition increasing in Q4
• Quality service
17 16 12 11
Dec-07 Dec-08 Dec-09 Dec-10 • Quality service
• Additional call centres set up
• Wide and efficient distribution frameworkNet additions
Outgoing MOU 52 55 53 48
3 4893 612
7,842
6,566
7,750
• Improved brand perception
• LC ARPU declined 10%
• Increased on-net traffic
(’000)
4 261 4,2302 475
4 512
3 489
4,230
• Increased on-net traffic
• Stable effective tariffs
• 25% decrease in local currency interconnect tl ff t b hi h t t ffi
1 755 2 054
Dec-07 Dec-08 Dec-09 Dec-10
H2 H1
revenue, partly offset by higher on-net traffic
*Legal
Nigeria- infrastructure and data highlights
• Rollout gained momentum in H2
• Maintained quality and capacity on networks
infrastructure and data highlights
CapexZAR (million)
10 222q y p y
• 4,800 BTS upgraded to increase capacity
• 480 3G BTS’s rolled out
• Transmission expansion4,789
4 519
10,222
5,668
9,610
4,700 • Transmission expansion
• 696 km of backbone fibre ring complete (Maiduguri-Yola-Gombe)
• National fibre expand project (phase 1)
1 8103 942
5 703
2 532
2 979 2 168
Dec-07 Dec-08 Dec-09 Dec-10H2 H1
Capex as % of revenue 23.6 30.5 30.7 14.0
National fibre expand project (phase 1), linking 71 high capacity BTS’s to fibre and integrating 66 sites
• Further rollout of WIMAX (total 5 states)BTS Rollout• Data as % of rev 5%
• 65% SMS revenue
• Segmented data bundles
*1,984
1,560
1,220
758639
802
726
1 332
785
1,220
146
758494 652
Dec-07 Dec-08 Dec-09 Dec-10H2 H1
*Including 3G
Ghana- operational highlightsoperational highlights
Launched Nov 1996 Market share 53% Population 25m Market sizing 20m (2015) Penetration 67% Shareholding 98%
Subscribers (‘000) • Subscribers increased 9% despite aggressive competition
• Introduction of new price plans 6 428
8 0018,721
Subscribers ( 000)/ARPU ($)
• Revised MTN Zone offer
• Loyalty programs
• Negative net additions in H2 due to
4 016
MTN Subscribers ('000)ARPU (USD)
14 12 8 7
Negative net additions in H2 due to SIM registration
• Quality of networks maintained
• Effective distribution
Outgoing MOU 104 119 105 114
Dec-07 Dec-08 Dec-09 Dec-10
Net additions • Effective distribution
• Stable LC ARPU
• Marginal decrease in market share d d
1 431
Net additions(’000) 2,412
1,5731,431 reduced
• Increased off-net traffic to due on-net price reductions
807 981 791 22
624 782720
, 3
• Stable effective tariffs807 791 722
-2Dec-07 Dec-08 Dec-09 Dec-10
H2 H1
Ghana- infrastructure and data highlights
• H2 rollout gained momentum
• Switch centre and fibre rollout
infrastructure and data highlights
CapexZAR (million)
3,092
2,586
• Maintained network quality
• 77 3G BTS’s added
• Data usage continues gaining momentum938
1 411
1 688
1,239
1,854
• Data usage continues gaining momentum
• 1.8m Mobile Money subs (Dec 10)
• Data as a % of revenue 7%262
8401 175 1 404977
Dec-07 Dec-08 Dec-09 Dec-10
H2 H1
• 72% SMS revenue
BTS Rollout
Capex as % of revenue 32.8 30.7 45.6 54.8
940
221 703
729718 704
328483
289
390221
440703
328 289 237
Dec-07 Dec-08 Dec-09 Dec-10
H2 H1
Iran- operational highlightsoperational highlights
Launched Aug 2006 Market share 44% Population 73m Market sizing 81m (2015) Penetration 92% Shareholding 49%
Subscribers (‘000) • Solid 28% increase in subscribers
• Segmented tariff plans
• Enhanced seasonal promo’s16,039
23,260
29 743
Subscribers ( 000)/ARPU ($)
• Continued focus on wider electronic distribution channels
• Efficient and improved brand awareness
6,006
,
D 07 D 08 D 09 D 10
MTN Subscribers ('000)
ARPU (USD) 10 9 8 8
campaigns
• 3% increase in LC ARPU
• Increased usage from improved capacity and i k
Dec-07 Dec-08 Dec-09 Dec-10
Net additions
Outgoing MOU 69* 60* 58* 60
coverage in key areas
• Increased on-net traffic
• Stable effective tariffs
(’000)
7,2214,446
10,033
6,483
• 3rd operator expected to launch in Q2 11
5 587
5,852
4 073 2 776
4,446 ,
4,023
1 8293 148 3 707
Dec-07 Dec-08 Dec-09 Dec-10
H2 H1
*Restated to exclude free minutes
Iran- infrastructure and data highlights
• Improved network quality and capacity in Tehran
infrastructure and data highlights
Capex (49%)ZAR (million)
3,326
• Site rentals remain challenging in Esfahan
• Increased coverage
• 77% population coverage (up 4%) 2 142
2 282
1,559
2,743
1,661
• 20% geographic coverage (up 9%)
• 5772km of road coverage (total 16700km)
• Slow uptake of WIMAX
714 6011 044 896
845 765
D 07 D 08 D 09 D 10
H2 H1• Slow uptake of WIMAX
• Bandwidth and content limitations
• Promo’s launched in H2
Dec-07 Dec-08 Dec-09 Dec-10
BTS Rollout
Capex as % of revenue 116.3 55.6 43.6 18.1
• Data as a % of revenue 20%
• 89% SMS revenue2,043
1,642 1,529
894 833
1 250
556
1,284
748 696 793 728
Dec-07 Dec-08 Dec-09 Dec-10
H2 H1
Syria- operational highlightsoperational highlights
Launched Jun 2002 Market share 45% Population 22m Market sizing 12.7m (2015) Penetration 50% Shareholding 75%
Subscribers (‘000)• Net additions gained momentum in H2
• Effective sales and marketing
• Segmented value propositions4 2494 898
Subscribers ( 000)/ARPU ($)
• Segmented value propositions
• Loyalty programs
• Improved brand perception
3 109 3 5394 249
MTN Subscribers ('000)ARPU (USD)
20 19 18 16
• Churn management remains a priority
• 8% decline in LC ARPU
• Increased in on-net traffic
Dec-07 Dec-08 Dec-09 Dec-10
Net additions
Outgoing MOU 130 124 120 108
• Marginal decrease in effective tariff872(’000)
517
710649
355
164 699478
517
430
355266
11171
Dec-07 Dec-08 Dec-09 Dec-10
H2 H1
Syria- infrastructure and data highlights
• Enhanced efficiency and capacity of networks
• Re-engineered radio transmission incl
infrastructure and data highlights
CapexZAR (million) 1,039
gfrequency plan to increase capacity
• Rollout affected by delayed resolution of BOT
• Limited 3G services730 362
410418
748
• Launch of data products
• Data as a % of revenue 11%
• 60% SMS revenue
247 309 386180
171 230
Dec-07 Dec-08 Dec-09 Dec-10
H2 H1
410
• 60% SMS revenueDec-07 Dec-08 Dec-09 Dec-10
BTS Rollout
Capex as % of revenue 9.0 16.0 10.7 6.0
504
596
415
22
193
444 283200
317
124 152221 215
Dec-07 Dec-08 Dec-09 Dec-10
H2 H1
Closing remarks
O i t f i k d ti
Current market conditions• Ongoing management of risks and precautionary measures
• Election update and local tensions
• Secession
• Sanctions
• Operational performance relatively unaffected
• EBITDA margin target of 45%
Some reflection…
• Capex investment strategy – timing and payoff
• Organic growth
• M&A
• People
Thanks and appreciation
Nazir PatelFinancial overview
Group Finance Director
Financial highlightsStrong free cash flow growth
• Strong underlying organic growth in key markets
g g
Group summary: 2008 - 2010(ZAR bn)
Reported’09-’10
Organic’09-’10
+3% +14%
• ZAR strength dampened reported results
• Higher EBITDA margin mainly due to Nigeria Iran and RSA
114.7111.9Rev+9%
+3%
due to Nigeria, Iran and RSA
• Strong free cash flow generated as EBITDA increased and capex reduced 64.2
65.8
102.5
OpEx +2% -7%
• Dividend payout ratio increased to 55%, dividend yield 4%**
19 543.2
59.3
C E
EBITDA50.546.1
+10% +23%
28.3 31.2
19.5
14 9
43.2
31.0 AFCF*
CapEx
14 9
-37% -30%
+108% +134%
2008
14.9
20102009
14.9
42% 41% 44% EBITDA marginC / R28% 28% 17% Capex / Rev
* EBITDA – Capex (approximates free cash flow)** Based on share price of ZAR 125.75
Financial overview
All i t t t b l d Z kh l l th i t t d
Zakhele
Infrastructure sharing
• All income statement numbers exclude Zakhele unless otherwise stated• Zakhele impact non-cash and in equity except for transaction costs
• Notional vendor finance – ZAR 1,382m Donation – ZAR 1,294m• ESOP – ZAR 171m Transaction costs – ZAR 126m
• Economic and trading conditions stabilised (but uncertain)• Increased competition in key markets resulting in tariff pressure
Trading conditions
Increased competition in key markets resulting in tariff pressure• Subscriber growth at reduced marginal ARPU’s• Strong data growth, declining access pricing
Foreign exchange rates• ZAR reported results negatively impacted by ZAR strength• Functional currency impact due to foreign currency bank balances
• Forex losses from Iran loans limited to EUR/USD FX exposure
Foreign exchange rates
• FX impact on capex, ZAR strength
Regulatory• MTR changes impacted revenue
• RSA – 1 Mar 10• Nigeria – 31 Dec 09
Key accounting considerations
Z bi h h ldi d d f 97 8% t 90 0% J 10
Change in ownership• Zambia shareholding reduced from 97.8% to 90.0% - Jun 10• Afghanistan shareholding reduced from 100% to 90.9% - Jun 10• Cyprus shareholding reduced from 51% to 50% - Nov 10
Put options net impact:• Nigeria
Put options
• Finance costs – ZAR 471m• Fair value adjustment – (ZAR 208m)• Forex loss – (ZAR 277m)• Non-controlling interests’ share of profits - (ZAR 230m)
• Afghanistan• Fair value adjustment– ZAR 36m• Non-controlling interests’ share of profits – (ZAR 42m)
• Group effective tax rate of 36.3% mainly due to: • Disallowed expenses – 2.3%
Taxation
• STC on Group dividends – 2.1%• Withholding tax – 2.5%• Education tax (Nigeria) – 1.3%
FX trends (average rate)ZAR strength severely impacted results
9 175 9 4779 830 9 872 10 103 10 253
ZAR Cedi Rial Naira ∆ ‘09 -‘10
ZAR strength severely impacted results
USD: Local currency
4%
Rial Naira ZAR Cedi
9 06 7 52 7 34
9 175 9 477
118 119
147 149 151 151-4%
-1%
7.62 8.13 9.06 8.32 7.52 7.34
0.99 1.06 1.38 1.42 1.43 1.44 -1%
+12%
Naira Cedi Rial
H1 - 08 YTD - 08 H1 - 09 YTD - 09 H1 - 10 YTD - 10
ZAR: Local currency Rial Naira Cedi
1 198 1 1521 091
1 1951 343 1 401
-17%
15.45 14.54 16.13 17.83 20.04 20.67
0 13 0 13 0.15 0.17 0.19 0.20 -18%
-16%
0.13 0.13
H1 - 08 YTD - 08 H1 - 09 YTD - 09 H1 - 10 YTD - 10
RevenueStrong organic growth impacted by strong ZAR
Revenue(ZAR bn)
Revenue breakdown(ZAR bn)
Strong organic growth impacted by strong ZAR
+14%
5.3
2.8
3.2 0.812.6127.33.3
54.6 58.7
114.7111.9102.5
+14%
-11%
114.7
111.9
56.4
LC ZARNIG 16% 1%RSA 8% 8%
46.156.057.3 IRA 42% 21%
GHA 14% 0%
• Revenue in key markets driven by strong subscriber growth
• Reported revenues adversely impacted by ZAR strength
2010FX2009 NIG RSA IRA GHA 2010CROther201020092008
H1H2 2010CR is at constant prior year FX rate
subscriber growth• Nigeria share of net adds above 60%• RSA growth driven by prepaid and data
revenue
strength• 2010 revenues at constant prior year FX rates
would be 14% higher than prior year
• Iran growth driven by higher subscribers, data and SMS
Data revenue (excl sms)High growth across operations
• Group data revenue grew by 48% from prior year
High growth across operations
Data revenue (ZAR bn)
% share of Group data
revenue
YOY growth rate
+48%• RSA contributed 58% of Group total
• Packet switched data users increased from 6.6m to 9.2m
Syria
Iran
Other6.2
0.30.20.4 6%
+100% 3%
NM 5%
+48%
+100%
• 3G handsets up to 3m includes 1.6m smartphones, data devices on network 946k
• Nigeria revenue increased by 25%. 150k dongles and 40k 3G handsets sold in 2010
Business Solutions
Nigeria
Syria
1.2
0.5
4.2*
NM 5%
+33% 20%
+25% 8%
dongles and 40k 3G handsets sold in 2010
• Iran revenue growth due to uptake in GPRS services (10.6m users)
• Ghana revenue increased by 87% Bundled
Solutions
0 9
0.40.1
0.10.2
• Ghana revenue increased by 87%. Bundled offerings and reduction of data pricing led to increased data usage. 44k dongles and 166k 3G subscribers on network
RSA3.6
0.9
+44% 58%
• Syria revenue growth over 100% due to better value proposition for both pre- and postpaid market
2.5
20102009
*Business Solutions included in other revenue in 2009
InterconnectLarge reduction in MTR in Nigeria and RSA
• MTR changes in Nigeria and RSA
• RSA peak rate dropped from ZAR 1.25 to
Large reduction in MTR in Nigeria and RSA
Group interconnect(ZAR bn)
p ppZAR 0.89
• Nigeria peak rate dropped from 11.4 Naira to 8.2 Naira
2009 19.5
Cost Revenue
-14.1• Interconnect revenue decreased 13%
• RSA revenue decreased 10%
• Nigeria revenue decreased 25% in local currency5 4 Margin % currency
• Net interconnect margin increased from 28% to 32%
• Higher on net traffic offset some of the
5.4 Margin %
28%
• Higher on-net traffic offset some of the interconnect rate decline
• RSA prepaid on-net improved 7pts to 61%
• Nigeria total on-net increased by 4pts to 83%
2010 17.0-11.5
• Nigeria total on net increased by 4pts to 83%
5.5 Margin %
32%32%
EBITDAStrong organic EBITDA growth
EBITDA breakdown(ZAR bn)
EBITDA(ZAR bn)
6.256 72 2
Strong organic EBITDA growth
+23%
21 626.3
50.546.1
43.2 4.51.8
1.8 0.3
50.5
56.72.2
-13%
21.6
44.0%41.1%42.1%
23.646.1
LC ZARNIG +24% +7%RSA +17% +17%
2010
24.2
2009
24.5
2008
19.6
GHAIRARSA 2010FX2010CROtherNIG2009
RSA +17% +17%IRA +67% +41%GHA +13% -4%
EBITDA marginH1H2
• Strong organic EBITDA growth in key markets • Strong margin improvements (local currency) through focused cost control initiatives
2010CR is at constant prior year FX rate
• 2010 EBITDA at constant prior year FX rates would be 23% higher than prior year
through focused cost control initiatives
• Overall strong subscriber growth positively impacted revenue
• Improvements in on-net traffic patterns• Improvements in on-net traffic patterns
EBITDA marginMargin expansion in Nigeria, Iran and RSA
Nigeria• Nigeria EBITDA increased by 7% (LC 24%)
due to
EBITDA margin reconciliation(%)
Margin expansion in Nigeria, Iran and RSA
due to• Revenue growth on subscriber increase• Decrease in interconnect cost• Outsourced spares management resulted in
impairment reversal0.4 0.1
0.5
44.0%44.5%1.3+3.4pts
pa e t e e saRSA• RSA EBITDA growth due to
• Revenue increase, higher data and prepaid revenueN t i t t i d d t i d
1.1
0.7
41.1%
+2.9pts
• Net interconnect improved due to increased on-net call percentage
• Lower distribution costIran• Iran EBITDA growth due toIran EBITDA growth due to
• Revenue increase on strong subscriber growth
• Single vendor maintenance, marketing cost reduction
Gh
2010FX2010CROtherGHAIRARSANIG2009
2010CR is at constant prior year FX rate Ghana• Margin decreased by 1pt. Higher electricity
and utility cost. Increased maintenance to improve quality
Other
2010CR is at constant prior year FX rate
Other• Margin improvement in Afghanistan, Syria
and Zambia. Margin deterioration in Sudan, Cameroon and Benin
CapExCapex reduction in most operations
CapEx(ZAR bn)
CapEx breakdown(ZAR bn)
31.2
Capex reduction in most operations
15.719 5
31.2
28.3 4.8
2.1
1 4
31.2-30%
18.0
11.0
19.5
28%28%
1.4 0.9
2.3
19.5
21.8
2.0
LC ZARNIG -46% -54%
-7%
2010
17%
8.5
2009
15.5
2008
10.3
h
NIG -46% -54%RSA -35% -35%IRA -44% -48%GHA +31% +19%
• Nigeria reduced capex in 2010 on core network and site rollout
201020092008 2010FX2010CROtherGHAIRARSANIG2009
Capex/RevH1H2
• Positive spend below June authorised(ZAR 21 3bn) mainly due to
2010CR is at constant prior year FX rate
and site rollout• RSA reduced capex in 2010 on switch facilities,
BSS (2G and 3G) and transmission (MW, VSAT etc)
• I d d d it ll t id
(ZAR 21.3bn) mainly due to
• 2009 peak capex spend
• Positive FX impact, ZAR 2.3bn
• Iran reduced spend on site rollout, prepaid systems (IN) and core network
• Ghana completion of switch centres and greater fibre rollout in 2010
• Ongoing price book reductions
CapEx guidanceSignificant capex reduction vs prior yearSignificant capex reduction vs prior year
ZAR m2010
Authorised2011 2009
South and East Africa 5 421 5 676 8 645South and East Africa 5 421 5 676 8 645
South Africa 3 908 3 920 6 034
Other operations 1 513 1 756 2 611
West and Central Africa 9 919 10 723 16 518
Nigeria 4 700 7 784 10 222
Gh 3 092 1 221 2 586Ghana 3 092 1 221 2 586
Other operations 2 127 1 718 3 710
Middle East and North Africa 3 402 4 871 5 785
Iran 1 661 1 317 3 326
Syria 410 1 066 748
Other operations 1 331 2 488 1 711
Head office companies 724 861 300
Total 19 466 22 131 31 248
2009 USD:ZAR 8.302010 USD:ZAR 7.342011 USD:ZAR 7.42
EBITDA - CapExStrong free cash flow growth
EBITDA - CapEx(ZAR bn)
EBITDA - CapEx breakdown(ZAR bn)
31.0
Strong free cash flow growth
+134%
15.29.3
3.93.1 0.6
3.9
31.034.94.3
+134%
-26%
27%
15 8
14.9
5.9
14.9
5.614.9 LC ZAR
NIG +98% +73%RSA +89% +89%
2010
15.8
2009
13%9.0
2008
15%9.3
2010IRARSANIG2009 FX2010CROtherGHA
IRA NM NMGHA NM NM
% revenueH2 H1
• Strong organic operational growth • Nigeria EBITDA increase, capex decrease after high investments in 2009 realising significant
2010CR is at constant prior year FX rate
• Low capex spend, led to high adjusted free cash flow
high investments in 2009, realising significant growth in adjusted free cash flow
• RSA and Iran increased adjusted free cash flow on the back of higher margins and lower capex
• Ghana high capex spend in 2010
Interest and taxLower interest charge and increase in effective tax rate
• Functional currency loss reduced due to cession of Iran loans to MTN Dubai
Lower interest charge and increase in effective tax rate
Net finance cost(ZAR m)
2010 2009 2008
• Iran loans forex exposure limited to EUR / USD (included in net forex losses)
• Functional currency loss due to cash build up in holding company and effect of strong ZAR
Net interest paid 1 925 2 201 1 851
Net forex losses 924 1 106 1 249
Functional currency 1 223 3 204 (2 442) in holding company and effect of strong ZAR closing rate
• New put option in Afghanistan
Functional currency losses/(gains) 1 223 3 204 (2 442)
Put options 22 (701) 1 259
Total 4 094 5 810 1 917
• Deferred tax higher than prior year due toTax(ZAR bn)
Total 4 094 5 810 1 917
• Significant capex spend in prior year
• Functional currency impact on Iran loans in the prior year
• Year on year rate increased due to
1.0
11.3
1.5
11.4
39.9% • Year-on-year rate increased due to
• Additional STC on interim dividend
• Lower investment allowance in Nigeria
3.1 2.0
1.2
7.8
36.3%
8.6
1.033.4%
7 3 • Impact of reduced put option credit on pre-tax income
2010
7.8
2009
6.4
2008
7.3
Normal taxDef taxSTC & other WHTEff rate
AHEPS (excl Zakhele)Increased adjusted headline earnings per share
AHEPS(ZAR cents)
• Adjusted EPS (excl Zakhele) increased by 20.5% to 909.1 cents
Increased adjusted headline earnings per share
• Strong earnings conversion from operational performance despite FX and higher tax charge
909
470
754
390
904
495
439364409
ZAR cents 2010 2009 Variance %
201020092008
H1H2
Attributable earnings per share 938.4 791.4 18.6
(Gain)/loss on disposal of non-current assets (7.2) 3.8 -
(Reversal of)/impairment of PPE and other non-current assets (8.5) 8.0 -
Basic headline earnings per share 922.7 803.2 14.9
Reversal of the put options in respect of subsidiaries (13.6) (48.9) 72.2p p p ( ) ( 8 )
Adjusted headline earnings per share 909.1 754.3 20.5
Net debtGroup in net cash position
1200013%Repayment schedule(ZAR bn)
Group in net cash position
ZAR bn
9.6
8.1
7.0
5 3 5 36000
8000
10000
56%29%
2%
Gross debt 35,35.3 5.3
2000
4000
600029%
02011 2012 2013 2014 >2014
Holdco's and RSA NigeriaIran SyriaOther
9% • USD 2.3bn of non-recourse debt closed in
49%8%
11%
9%2010, partially drawn
• Unproductive debt of ZAR 5.6bn remains due to recap of Dubai
49%
23%
8%• Gross intercompany loans (excl holding
companies and SA) total ZAR 11.7bn
• Short term liabilities include ZAR 2.0bn from the capital market and ZAR 3 0bn due under
Cash 36,2
the capital market and ZAR 3.0bn due under the international syndication
• Syrian cash to be used in BOT conversionNet cash 0.9
Income statementZAR bnZAR bn
2010(excl Zakhele)
2010 (incl Zakhele)
2009 Variance %(excl Zakhele)
Revenue 114.7 114.7 111.9 +3
EBITDA 50.5 47.5 46.1 +10
EBITDA Margin % 44 0% 41 5% 41 1% +2 9ptsEBITDA Margin % 44.0% 41.5% 41.1% +2.9pts
Depreciation -13.2 -13.2 -11.8 -12
Amortisation -2.1 -2.1 -2.7 +22
Profit from operations 35.2 32.2 31.6 +11
Net finance cost -4.1 -4.1 -5.8 +29
Profit before tax 31.1 28.1 25.8 +21
Income tax expense -11.3 -11.3 -8.6 -31
Profit after tax 19.8 16.8 17.2 -15
Non-controlling interests -2.5 -2.5 -2.5 -
Attributable profit 17 3 14 3 14 7 +18Attributable profit 17.3 14.3 14.7 +18
Effective tax rate 36.3% 40.1% 33.4% -2.9pts
Statement of financial positionZAR bnZAR bn
2010 2009Non-current assets 99.7 110.2
lProperty, plant & equipment 63.4 67.5Goodwill and other intangible assets 31.6 37.5Other non-current assets 4.7 5.2Current assets 54.3 46.054.3 46.0Bank balances 35.9 24.0Restricted cash 0.3 0.7Other current assets 18.1 21.3
f di l l ifi d h ld f lAssets of disposal group classified as held for sale 0.8 -Total assets 154.8 156.2
Capital and reserves 74.0 72.9pNon-current liabilities 34.0 28.4Borrowings 24.9 21.1Deferred taxation and other non-current liabilities 9.1 7.3C t li biliti 6 8Current liabilities 46.8 54.9Non interest-bearing liabilities 36.3 39.0Interest-bearing liabilities 10.5 15.9Equity and liabilities 154.8 156.2q yNet debt -0.9 12.2
Net debt/EBITDA -0.02 0.26
USD:ZAR 6.61 7.39
Statement of cash flowsZAR bnZAR bn
2010 2009
Net cash generated from operations 50 5 49 6Net cash generated from operations 50.5 49.6
Net interest paid -1.5 -3.1
Taxation paid -8.0 -6.8
Dividends paid -6.3 -3.4
Cash inflows from operating activities 34.7 36.3
Acquisitions of PPE (excl software) 15 3 27 7Acquisitions of PPE (excl software) -15.3 -27.7
Acquisition of intangible assets -1.2 -2.0
Other investing activities 0.8 -3.5
Cash outflows from investing activities -15.7 -33.2
Cash outflows from financing activities -2.0 -0.9
Net movement in cash and cash equivalents 17.0 2.2
Cash and cash equivalents at the beginning of the year 22.6 25.6
Realised losses on bank accounts -3.7 -5.1
Cash and cash equivalents at the end of the year 35.9* 22.6*
* Incl bank balance ZAR35 947m (2009:ZAR23 999m) and bank-overdraft ZAR40m (2009:ZAR1 353m)
Cyril RamaphosaMessage from MTN Group chairman
Phuthuma Nhleko’s history with the MTN Group
Joined the board as non- executive chairman in Jun 2001 and as CEO of MTN Group Jul 2002
2000 2005 2010
Operations 5 11 21
Population 68m 344m 552mPopulation 68m 344m 552m
Market cap (ZAR bn) 58 (31 March 2000) 103 (31 Dec 2005) 253 (31 Dec 2010)
Revenue (ZAR bn) 6 29 115
EBITDA 2 12 50.5
Subs(m) 2,3 12 141,7
Welcome to Sifiso Dabengwa
History at MTN
Infrastructure sharing
• With MTN for 12 years
• Joined 1999 - MD MTN SA
• 2004 -2006 – CEO MTN Nigeria
Previous roles
2004 2006 CEO MTN Nigeria
• 2006 -2011 – COO MTN Group
• Executive Director at Eskom responsible for sales, customer service, electrification and distribution technology
Previous roles
• Consulting electrical engineer in the building services industry
• Technical management roles in the mining and railway sectors
• BSc Electrical EngineeringMBA d
Education
• MBA degree
Sifiso Dabengwad d
Looking ahead
Group COO and CEO designate
Looking forward
Strategic continuity
• In line with MTN’s previous announcements on the 15 July 2010 and 20 August 2010, the vision remains unchanged as does the strategy to balance increasing returns to shareholders with opportunistic M&A
• Leverage data opportunities and facilitate increased smart phone availability
Revenue opportunities
• Leverage data opportunities and facilitate increased smart phone availability• Segment focused products and services• Partnership model for development of value added services offerings
• Continued evaluation of individual markets for infrastructure sharing opportunities of
Optimising efficiencies
both passive infrastructure and fibre• Leverage structural framework formed for key projects
• Cost effective platforms for delivery of data and services • Ongoing standardisation of systems and processesOngoing standardisation of systems and processes• Increased centralisation of procurement activities and rationalisation of suppliers • Shared services and outsourcing
Looking forward (cont)
E t t k i t t d ll t l ff ti l t l d
Rollout• Execute network investments and rollout plans effectively to manage supply and
demand; network quality as a competitive edge
• Upgrade and optimise networks to meet increased demand in data services
• Continue to investigate options to improve sustainable returns to shareholders
Shareholder returns
• Dividend payout ratio policy of 55%
• Continued engagement with authorities ensure the social and commercial success of the telecommunications sector
Regulatory
Subscriber guidance 2011
Net additions guidance for 2011‘000000
South Africa 2,000
Nigeria 4,200
Ghana 390Ghana 390
Iran 3,350
Syria 600
R t 6 385Rest 6,385
16,925
Capex guidance - 2011
(ZAR mn) Authorised2011
5%
17%16% 2G
3G
South and East Africa 5 676
South Africa 3 920
Other operations 1 756
17%
19%
26%
Cable/fibreCore and otherIT & VASPhysical infrastructure
Other operations 1 756
West and Central Africa 10 723
Nigeria 7 7845%
6%
3%5%
11%
Ghana 1 221
Other operations 1 718
54%
9%4%
22% 48%
6%
27%
Middle East and North Africa 4 871
Iran 1 317
6%
8%17%
Syria 1 066
Other operations 2 488
Head office companies 861
54%
10%
21%8%
4%49%
Head office companies 861
Total 22 1317% 22%
QuestionsThank you
Notice
The information contained in this document has not been verified independently. No representation p y por 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 and can be affected by other factors that 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 liability 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.
ff fThis 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
Nigeria - FinancialStrong free cash flow growth achieved
• Significant growth in AFCF for Nigeria in 2010, following consistent cash flow generation
Strong free cash flow growth achieved
Nigeria YTD financial: 2008 - 2010(ZAR bn)
Reported’09-’10
Organic’09-’10
consistent cash flow generation in prior years
• EBITDA increased by 7.1% (LC 23.8%)
33.533.331.6 Rev +1% +16%
+5%+1%
• Revenue growth due to subscriber increase
• Cost optimisationprogrammes
13.6 12.4
EBITDA
OpEx
13.4+9% -6%
+7% +24% programmes
• Higher on-net traffic
• Reduced capex in 2010 on core network and site rollout
9.610.2
4.7 CapEx
EBITDA21.119.7
18.2
+7% +24%
-54% -46%
network and site rollout
AFCF16.4
9.58.6
+73% +98%
201020092008
58% 59% 63% EBITDA margin30% 31% 14%
gCapex / Rev
NigeriaNGN bn
Revenue
• Increase in subscribers
NGN bn
Revenue 2010
• Increase in subscribers
• Increase in dongles and 3G handsets
• Reduction in interconnect rate
2009 596.5
Airtime and subscription 92.5
Data 4.8 Reduction in interconnect rate
Direct network and operating costs
• Increase in BTS sites
Interconnect (12.6)
Other 10.6
2010 691.8
Selling and distribution
• FIFA promotional costs
% Growth 16.0%
EBITDA 2010
• Commission increase in line with revenue
EBITDA margin
2009 351.8
Revenue 95.3
Selling and distribution (12 5)• Improvement, on-net ratio up
Selling and distribution (12.5)
Interconnect and roaming costs 11.1
Other (9.9)
2010 435.82010 435.8
% Growth 23.9%
EBITDA margin 63.0%
RSA – Financial*Strong free cash flow growth achieved
• Consistent generation of AFCF in prior years, with 2010 increasing by 89%
Strong free cash flow growth achieved
RSA YTD financial: 2008 - 2010(ZAR bn)
Reported’09-’10
Organic’09-’10
increasing by 89%
• EBITDA increase
• Revenue increase, higher data and prepaid revenue
35.8
33.132 1
Rev +8% +8%+3%
+8%
data and prepaid revenue
• Interconnect rate reduction, increased on-net call percentage
23.6 OpEx
32.1
-4% -4%• Lower distribution cost due to
distribution through internal service providers
• Reduced capex in 2010 on EBITDA2 2
22.721.5
+17% +17% pswitch facilities, BSS (2G and 3G) and transmission (MW, VSAT etc)
4.9 6.03.9
AFCF
CapEx
EBITDA
8.3
12.2
4 4
10.4
5.7
10.6+17% +17%
-35% -35%
+89% +89%
Dec 2010Dec 2009
4.4
Dec 2008
33% 31% 34% EBITDA i33% 31% 34%15% 18% 11%
EBITDA marginCapex / Rev
* Excl Network Solutions and Business Solutions
RSA*ZAR bn
Revenue• Higher data and prepaid revenue
ZAR bn
Revenue 2010
• Higher postpaid revenue but lower ARPU• Out-of-bundle usage• Growth in hybrid and telemetry base
• Drop in interconnect rates
2009 33.1
Airtime and subscription 1.4
Data 1.1 • Drop in interconnect ratesDirect network and operating costs• Higher rent and utilities• Higher maintenance
Interconnect (0.7)
Other 0.9
2010 35.8Handsets and accessories• Volume increase • Average cost: prepaid down, postpaid upSelling and distribution
% Growth 8.2%
EBITDA 2010Selling and distribution• Marketing higher due to FIFA• Lower distribution costEBITDA margin
2009 10.4
Revenue 2.7
Interconnect and roaming costs 0 9 • Higher on-net traffic offset some of the interconnect rate decline
Interconnect and roaming costs 0.9
Other (1.8)
2010 12.2
% Growth 17.3%% Growth 17.3%
EBITDA margin 34.1%
* Excl Network Solutions and Business Solutions
Iran - Financial*Strong free cash flow growth achieved
• Positive AFCF of ZAR 2.1bn
• Strong cash flow generation on
Strong free cash flow growth achieved
Iran YTD financial: 2008 - 2010(ZAR bn)
Reported’09-’10
Organic’09-’10
Strong cash flow generation on lower capex and higher revenue
• Revenue increase on strong subscriber growth and stable
9.2
7.6
Rev +21% +42%+55%
+21%
subscriber growth and stable ARPU’s
• 2043 BTS sites in 2009 v 1284 in 2010
O E
Rev share
2.27.6
2.1
4.9
1 3
-5% -21%
14% 34%• Expansion of prepaid system
(IN) and core network in 2009
1.7
3.2
CapEx
EBITDA
OpEx
3.8
2.7
2.8
2.1
1.3
+41% +67%
-14% -34%
-48% -44%
3.3AFCF2.1
-0.61 2
2.7
1.5
8% %
NM NM
201020092008
-1.2
30% 35% 41% EBITDA margin30% 35% 41%55% 43% 18%
EBITDA marginCapex / Rev
* at 49% proportion
Iran*IRR bn
Revenue
• Increase in subscribers
IRR bn
Revenue 2010Increase in subscribers
• Stable ARPU
• Uptake of GPRS
S lli d di ib i
2009 9 075
Airtime and subscription 2 017
Data 146Selling and distribution
• Decreased marketing spend
• Commission in line with revenue
Interconnect 655
Other 991
2010 12 884
Direct network operating costs
• Single vendor maintenance
% Growth 42.0%
EBITDA 2010
2009 3 183
Revenue 3 809
Selling and distribution (26)Selling and distribution (26)
Interconnect and roaming costs (477)
Other (1 185)
2010 5 304
% Growth 66.6%
EBITDA margin 41.2% * at 49% proportion
Ghana - FinancialHigh 2010 infrastructure investment
• High capex spend in 2010
• Completion of the switch
High 2010 infrastructure investment
Ghana YTD financial: 2008 - 2010(ZAR bn)
Reported’09-’10
Organic’09-’10
pcentres
• High fibre rollout in 2010
• EBITDA increase by 13% in 5.7
5.76.0
Rev 0% +14%
-5% +0%
local currency
• Revenue growth following strong subscriber growth and success of MTN Zone3.1
OpEx3.2
5.7
3.2-3% -17%
• EBITDA margin decreased by 0.3pts
1 9
2.5 EBITDA2.62.8
-4% +13%
1.9
2.63.1 CapEx
0.0
0.9
+19% +31%
NM NMAFCF
2010
-0.6
20092008
46% 45% 44% EBITDA margin
NM NM
46% 45% 44%32% 46% 54%
EBITDA marginCapex / Rev
GhanaGHC m
Revenue
• Increase in subscribers
GHC m
Revenue 2010Increase in subscribers
• 3G uptake
Direct network operating costs
I d l i i d ili
2009 973
Airtime and subscription 104
Data 12• Increased electricity and utility cost
• Increased maintenance to improve quality
Interconnect and roaming
Interconnect 5
Other 16
2010 1 110
• On-net ratio decreased from 86% to 83%
Selling and distribution
• FIFA promotion
% Growth 14.1%
EBITDA 2010 • FIFA promotion
• Media inflation cost driven by competition
Cost of handsets and accessories
2009 436
Revenue 137
Selling and distribution (25) • Increased handset cost due to uptake of bundled offers (to drive data and 3G)
EBITDA margin
Selling and distribution (25)
Interconnect and roaming costs (24)
Other (30)
2010 494 • Down by 0.3pts due to higher direct network cost
2010 494
% Growth 13.3%
EBITDA margin 44.5%
SYRIA - FinancialStrong free cash flow growth achieved
• AFCF increased by 71% in 2010
Strong free cash flow growth achieved
Syria YTD financial: 2008 - 2010(ZAR bn)
Reported’09-’10
Organic’09-’10
• EBITDA growth
• Revenue growth due to increase in subscribers, smsand data bundles
6.87.0
6.5 Rev -3% +10%
+8% -3%
and data bundles
• Selling and distribution cost decrease on commission rate reduction
Rev share3.2
3.12.8 -3% -19%
• Capex down following high spend in 2009
OpEx2.02.51.9 +20% +11%
1.00.7
AFCF
CapEx
EBITDA
1.2
0.41.61.4
0 8
1.8 +14% +31%
-43% -37%
AFCF
20102009
0.7
2008
0.8
28% 20% 24% EBITDA margin
+71% +86%
28% 20% 24%15% 10% 6%
EBITDA marginCapex / Rev
SyriaSYP bn
Revenue
• Increase in subscribers
SYP bn
Revenue 2010Increase in subscribers
• SMS and data bundles
Direct network operating costs
R h
2009 39.3
Airtime and subscription 3.2
Data 1.1• Revenue share
Interconnect and roaming
• Increased international calls (economic th)
Interconnect 0.3
Other (0.4)
2010 43.5growth)
Selling and distribution
• Commission rate decrease
% Growth 10.7%
EBITDA 2010
Handsets and accessories
• Increase in 3G handset sales2009 7.7
Revenue 4.2
Selling and distribution costs 0 2Selling and distribution costs 0.2
Interconnect and roaming (0.4)
Other (1.4)
2010 10.32010 10.3
% Growth 33.8%
EBITDA margin 23.7%
Net debtZAR mZAR m
Cash and Interest Net debt Net debt cash
equivalentsbearing
liabilities*Intercompany
eliminations/(cash)
2010/ (cash)
2009
South & East Africa (4 725) 14 550 (12 971) (3 146) (783)
RSA (3 786) 11 900 (11 726) (3 612) ( 1 852)RSA (3 786) 11 900 (11 726) (3 612) ( 1 852)
Other operations (939) 2 650 (1 245) 466 1 069
West & Central Africa (9 786) 13 543 (628) 3 129 8 973
Nigeria (8 480) 10 332 - 1 852 7 461
Ghana (168) - - (168) (469)
Other operations (1 138) 3 211 (628) 1 445 1 981Other operations (1 138) 3 211 (628) 1 445 1 981
Middle East & North Africa (7 965) 7 105 (5 928) (6 789) (5 069)
Iran (2 874) 3 760 (3 195) (2 309) (1 350)
Syria (3 791) - - (3 791) (3 331)
Other operations (1 300) 3 345 (2 733) (688) (388)
Head office companies (13 756) 22 648 (2 992) 5 901 9 055
Total (36 232) 57 846 (22 519) (905) 12 176
* Including long- and short-term borrowings and overdrafts
Exchange rates analysis
Average (EBITDA) Closing
2010 2009 % var 2010 2009 % var
Rand per USD 7.34 8.32 12 6.61 7.39 11
Nigerian Naira per USD 151.19 149.20 (1) 152.11 149.97 (1)
Nigerian Naira per ZAR 20.67 17.83 (16) 23.00 20.29 (13)
Iranian Rials per USD 10 252.62 9 871.69 (4) 10 356.00 10 004.00 (4)
Iranian Rials per ZAR 1 401.06 1 195.03 (17) 1 565.67 1 353.72 (16)
Ghanaian Cedis per ZAR 0.20 0.17 (18) 0.22 0.19 (16)
Syrian Pounds per ZAR 6.39 5.60 (14) 7.13 6.20 (15)
MTN – data sheet part 1
Group SEA WECA MENA Nigeria RSA Ghana Syria Iran
Market overview
Population (m) 552.3 111.1 248.8 192.4 153.5 50.3 24.5 21.8 73.2
Mobile penetration (%) 49 105 67 50 92
N b f t 79 21 40 18 5 4 5 2 3Number of operators 79 21 40 18 5 4 5 2 3
Operational data
Subscribers (‘000) 141 597 31 891 64 448 45 258 38 669 18 841 8 721 4 898 29 743
ARPU (USD) 11 21 7 16 8
Outgoing MOU (mins) 48 71 114 108 60
Market share (%) 52 35.8 53 45 44
Operational data (ZAR bn)
Revenue 114.7 42.5 49.9 22.0 33.5 35.8 5.7 6.8 9.2
EBITDA 50.5 14.6 27.7 7.4 21.1 12.2 2.5 1.6 3.8
EBITDA margin (%) 44.0 34.4 55.5 33.6 62.9 34.1 43.9 23.5 41.3
CAPEX 19 5 5 4 9 9 3 4 4 7 3 9 3 1 0 4 1 7CAPEX 19.5 5.4 9.9 3.4 4.7 3.9 3.1 0.4 1.7
Depreciation 13.2 3.7 7.2 2.3 5.0 2.7 0.8 0.5 1.0
Amortisation 2.1 0.5 0.8 0.7 0.1 0.3 0.2 0.3 0.1
MTN – data sheet part 2 (SEA)
Sub Total RSA Botswana Zambia Swaziland Uganda Rwanda
Shareholding (%) 100 53 90 30 97 55Shareholding (%) 100 53 90 30 97 55
Licence period (years) 20 15 15 10 20 13
Market overview
Population (m) 111.1 50.3 1.9 13.5 1.0 34.1 10.3
Mobile penetration (%) 105 136 37 71 34 33
M k t iti 2 1 2 1 1 1Market position 2 1 2 1 1 1
Number of operators 21 4 3 3 1 7 3
Market size (m) (2015) 105.7 62.9 2.8 9.9 0.9 21.9 7.3
Operational data
Subscribers (‘000) 31 891 18 841 1 414 1 900 726 6 463 2 547
ARPU (USD) 21 12 6 12 5 5
Market share (%) 35.8 54 38 100 56 75
MTN – data sheet part 3 (WECA)
Sub Total Nigeria Ghana Cameroon Congo B Benin G. Bissau G. Conakry Liberia Cote d’Ivoire
Sh h ldi (%) 76 98 70 100 75 100 75 60 65Shareholding (%) 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) 248.8 153.5 24.5 19.9 4.0 9.1 1.6 10.8 3.4 22.0
Mobile penetration (%) 49 67 40 85 52 48 36 40 64
Market position 1 1 1 1 1 1 1 1 1
Number of operators 40 5 5 3 4 5 3 5 5 5
Market size (m) (2015) 189.4 117.0 20.1 11.0 4.5 6.9 1.2 7.3 1.9 19.5
Operational data
Subscribers (‘000) 64 448 38 669 8 721 4 792 1 666 2 144 568 1 761 746 5 381( )
ARPU (USD) 11 7 8 10 9 8 5 10 7
Market share (%) 52 53 60 49 45 75 45 54 38
MTN – data sheet part 4 (MENA)
Sub Total Sudan Iran Afghanistan Cyprus Syria Yemen
Shareholding (%) 85 49 91 50 75 85Shareholding (%) 85 49 91 50 75 85
Licence period (years) 20 15 15 20 15(BOT) 15
Market overview
Population (m) 192.4 41.7 73.2 30.6 0.8 21.8 24.3
Mobile penetration (%) 39 92 39 109 50 48
Market position 2 2 1 2 2 1Market position 2 2 1 2 2 1
Number of operators 18 3 3 4 2 2 4
Market size (m) (2015) 165.3 34.6 82.0 19.7 1.2 12.7 15.1
Operational data
Subscribers (‘000) 45 258 3 475 29 743 4 045 241 4 898 2 856
ARPU (USD) 5 8 5 32 16 6
Market share (%) 21 44 34 27 45 40
Final audited results f d d 31 D b 2010
MTN Group Limited
for year ended 31 December 2010