MTN Group Limited Final audited results for year ended d 31 December 2010

Transcription

1 MTN Group Limited Final audited results for year ended d 31 December 2010

2 Agenda Strategic and operational overview Phuthuma Nhleko Group President and CEO Financial overview Nazir Patel Group Finance Director Message from the MTN Group Chairman Cyril Ramaphosa Looking ahead Sifiso Dabengwa Group COO and CEO designate

3 Strategic and operational overview Phuthuma Nhleko Group President and CEO

4 MTN vision To be the leader in telecommunications in emerging markets Convergence & operational evolution Leverage existing footprint & intellectual capacity Consolidation & diversification Increased competitiveness Best practice Hub and Procurement Skills Value Diversification Brand cluster synergies optimisation proposition Execution excellence

5 Medium term considerations - market opportunities 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 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 risks may appear overwhelming at times Interesting facts 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% compared to global l 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 forces (Democracy, fiscal discipline) FDI in Africa has increased from USD15 billion to USD 80 billion in 8 years

6 Group highlights Group subscribers Up 22,0% to 141,6 million EBITDA margin Up 2,9% points to 44,0% Approximate FCF Up 108% to ZAR 31,0 billion Adjusted HEPS Up 20,5% to 909,1 cents Final dividend Net cash per share of of 349 cents ZAR 905 million Dividend payout ratio increased to 55%

7 Impact on financial framework Continued organic growth Capex spend peaked Cost Cost efficiencies efficiencies Shareholder returns Final dividend per share of 349 cents Increased cash generation Opportunistic M&A

8 Revenue growth Revenue growth ZAR (billion) Underpinned by subscriber growth Negatively impacted by strong rand Rev (constant currency Rev (reported) % 2,5% 2009 Dec-09 Dec Regulation of termination rates in SA and Nigeria resulted in a decline in revenue Significant increase in data revenue, albeit off a low base Proportionate subscribers (million) Total subscribers (million) % 20,8% 26% 32% 22% 32% 47% 47% 45% 46% 27% 27% 23% 22% Dec-09 Dec-10 Dec-09 Dec-10 SEA WECA MENA

9 Key revenue drivers Data and SMS revenue Introduction of new commercial and ZAR (billion) innovation function to drive data products and services % 20% 20% % 11% 15% % 7% 10% South Nigeria Ghana Iran Syria Africa (49%) Data ZAR '000 SMS ZAR '000 Data (incl SMS) as % of rev Mobile money customers ( 000) % 0% Distribution of data devices (smartphones and other related products) Data opportunity (other than SMS) still immature outside of SA Investments and upgrades of network and IT infrastructure t including 3G and WIMAX Investments in undersea cables implemented EASSY (Aug 10), EIG (partly, Feb 10) Mobile money 4,3 million customers (Dec 10) Launched in 11 countries to date South Africa Uganda Ghana Cote d' Ivoire Rwanda Benin

10 EBITDA and key drivers EBITDA growth ZAR (billion) EBITDA 20 (constant currency 10 EBITDA (reported) 0 EBITDA margin (%) Group SEA WECA % 9,7% 2009 Dec-09 Dec % 44.0% 32.0% 34.2% 53.5% 55.5% Cost containment initiatives on opex and staff costs Decreased selling, distribution and marketing costs Decrease in interconnect cost Supply chain management Increased centralisation of procurement activities and rationalisation of suppliers Infrastructure sharing Strategy pursue passive infrastructure sharing considering circumstances of each market MTN Ghana tower sharing joint venture with ATC established Structural framework for Shared services and outsourcing Standardisation and optimisation of systems and processes MENA 26.9% 33.6% Dec-09 Dec-10

11 Regulatory Market regulation Signed MOU in Syria for the conversion of the BOT to a freehold licence Discussions on terms ongoing Infrastructure Expected terms : effective date Apr 11, 20 year GSM licence, upfront fee of ± SYP 25 bn and between 25% and sharing 27% rev share 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/min Nigeriai Implemented 31 Dec 09 SIM registration South Africa 81% of prepaid and 71% of postpaid base RICA d (Dec 10) Deadline extended to 30 Jun 11 Nigeria i : 34% of base registered, regulator issued directive i to sell partly active new SIMS from 14 Feb 11 Ghana : 70% of base registered, existing SIMS to be registered by Jun 11

12 Other key developments People/sustainability MTN Academy Delivers focused learning services and solutions to meet key talent and critical skills needs Reached over employees over 3 years (classroom and e-learning) Effective talent retention strategies incl. job rotation and special assignment projects Greening operations 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 opportunities posed to MTN by climate change and improve business efficiencies Social and economic development projects through MTN Foundations across ops BEE MTN Zakhele Achieved MTN SA s objectives in creating a broad-based empowerment transaction Holds 4% of MTN Group 80,900,000 MTN Zakhele shares offered to members of the Black public Allocated shares to 120,349 individuals and 2,203 groups

13 Operational framework N A L Brand preference Quality service Efficient distribution I N T E R Customer Experience e E R E X T Products and value added services Segmentation N A L Experienced people

14 South Africa operational highlights Launched Jun 1994 Market share 36% Population 50.2m Market sizing 63m (2015) Penetration 105% Shareholding 100% Subscribers ( 000) 14,799 17,169 16,067 18,842 Subs growth driven by prepaid segment MTN Zone Mahala4Life Prepaid retail data promo s Marginal postpaid growth Growth in hybrid subs; +57% Prepaid Postpaid Net additions ( 000) ,365 Dec-07 Dec-08 Dec-09 Dec-10 2,370 2, Decrease classic subs; 5% Stabilised network and billing systems Optimised branded distribution footprint 2,775 Customer experience Strategic locations Brand preference improvement ,035 FIFA 2010 Soccer World Cup Decreased churn H2 H ,102 Dec-07 Dec-08 Dec-09 Dec-10

15 South Africa - operational highlights ARPU ZAR Increased prepaid ARPU Larger % of rev generating g subs in reported base Increased data revenue Declining postpaid ARPU Postpaid Blended Prepaid Avg. total t MOU comprises both incoming and outgoing minutes Dec-07 Dec-08 Dec-09 Dec Lower out-of-bundle usage Growth in hybrid and telemetry base Initial impact of MTR cut Revenue and cost decline Increased on-net traffic positive for margin Outgoing MOU

16 South Africa - infrastructure and data highlights Capex ZAR (million) 6,034 H2 H1 Capex as % of revenue 2, , , Dec-07 Dec-08 Dec-09 Dec G and 284 3G BTS s added 49% 3G population p coverage Expansion and modernisation of 3G and data core network for increased capacity Migration of various voice interfaces to IP based for increased bandwidth Fibre deployment Ongoing deployment of national long distance, behind schedule Continued high data growth Data revenue ZAR (million) 9.2m packet data users (49% of base) 6, m Smartphones H2 H1 4, ,596 2,756 p k modems (incl modules and USB dongles) Data product drive Business Solutions remains challenging Rev up 11% Dec-07 Dec-08 Dec-09 Dec-10 Maintained margin As % of SA revenue (excl. Handsets, incl. SMS) % cut in fixed-line data tariffs

17 Nigeria - operational highlights Launched Aug 2001 Market share 52% Population 152m Market sizing 117m (2015) Penetration 49% Shareholding 76%* Subscribers ( 000) /ARPU ($) MTN Subscribers ('000) ARPU (USD) , Increased market share Attractive segmented value propositions Quality network Dec-07 Dec-08 Dec-09 Dec-10 Quality service Outgoing MOU Effective churn management Aggressive competition increasing in Q4 Additional call centres set up Net additions ( 000) 6,566 7, , Wide and efficient distribution framework Improved brand perception LC ARPU declined 10% Increased on-net traffic 4, Stable effective tariffs H2 H ,230 25% decrease in local currency interconnect revenue, partly offset by higher h on-net traffic *Legal Dec-07 Dec-08 Dec-09 Dec-10

18 Nigeria - infrastructure and data highlights Capex ZAR (million) H2 H1 Capex as % of revenue BTS Rollout 9,610 10, ,668 4,789 4, Dec-07 Dec-08 Dec-09 Dec *1,984 1,560 1, Rollout gained momentum in H2 Maintained quality and capacity on networks 4,800 BTS upgraded to increase capacity 480 3G BTS s rolled out Transmission expansion 696 km of backbone fibre ring complete (Maiduguri-Yola-Gombe) 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) Data as % of rev 5% 65% SMS revenue Segmented data bundles H2 H1 *Including 3G Dec-07 Dec-08 Dec-09 Dec-10

19 Ghana - operational highlights Launched Nov 1996 Market share 53% Population 25m Market sizing 20m (2015) Penetration 67% Shareholding 98% Subscribers ( 000) /ARPU ($) ,721 Subscribers increased 9% despite aggressive competition Introduction of new price plans MTN Subscribers ('000) ARPU (USD) Dec-07 Dec-08 Dec-09 Dec-10 Revised MTN Zone offer Loyalty programs Negative net additions in H2 due to SIM registration Outgoing MOU Net additions ( 000) 2,412 Quality of networks maintained Effective distribution Stable LC ARPU 1, ,573 Marginal decrease in market share reduced d H2 H Dec-07 Dec-08 Dec-09 Dec-10-2 Increased off-net traffic to due on-net price reductions Stable effective tariffs

20 Ghana - infrastructure and data highlights Capex ZAR (million) H2 H1 Capex as % of revenue BTS Rollout 3,092 2, , , Dec-07 Dec-08 Dec-09 Dec H2 rollout gained momentum Switch centre and fibre rollout Maintained network quality 77 3G BTS s added Data usage continues gaining momentum 1.8m Mobile Money subs (Dec 10) Data as a % of revenue 7% 72% SMS revenue H2 H Dec-07 Dec-08 Dec-09 Dec-10

21 Iran - operational highlights Launched Aug 2006 Market share 44% Population 73m Market sizing 81m (2015) Penetration 92% Shareholding 49% Subscribers ( 000) /ARPU ($) MTN Subscribers ('000) ARPU (USD) 6,006 16,039 23, Dec-07 Dec-08 Dec-09 Dec-10 Outgoing MOU 69* 60* 58* 60 Solid 28% increase in subscribers Segmented tariff plans Enhanced seasonal promo s Continued focus on wider electronic distribution channels Efficient and improved brand awareness campaigns 3% increase in LC ARPU Net additions ( 000) 10,033 Increased usage from improved capacity and coverage in key areas Increased on-net traffic 5,852 4,446 7,221 6, Stable effective tariffs 3rd operator expected to launch in Q2 11 H2 H1 4, Dec-07 Dec-08 Dec-09 Dec-10 *Restated to exclude free minutes

22 Iran - infrastructure and data highlights Capex (49%) ZAR (million) 2,743 3,326 Improved network quality and capacity in Tehran Site rentals remain challenging in Esfahan 1, ,661 Increased coverage 77% population coverage (up 4%) % geographic coverage (up 9%) H2 H Dec-07 Dec-08 Dec-09 Dec km of road coverage (total 16700km) Slow uptake of WIMAX Capex as % of revenue BTS Rollout ,043 Bandwidth and content limitations Promo s launched in H2 Data as a % of revenue 20% 89% SMS revenue 1,642 1, , H2 H Dec-07 Dec-08 Dec-09 Dec-10

23 Syria - operational highlights Launched Jun 2002 Market share 45% Population 22m Market sizing 12.7m (2015) Penetration 50% Shareholding 75% Subscribers ( 000) /ARPU ($) Net additions gained momentum in H2 MTN Subscribers ('000) ARPU (USD) Dec-07 Dec-08 Dec-09 Dec-10 Effective sales and marketing Segmented value propositions Loyalty programs Improved brand perception Churn management remains a priority Outgoing MOU % decline in LC ARPU Net additions ( 000) 872 Increased in on-net traffic Marginal decrease in effective tariff H2 H Dec-07 Dec-08 Dec-09 Dec-10

24 Syria - infrastructure and data highlights Capex ZAR (million) 1,039 H2 H Dec-07 Dec-08 Dec-09 Dec-10 Enhanced efficiency and capacity of networks Re-engineered radio transmission incl frequency plan to increase capacity Rollout affected by delayed resolution of BOT Limited 3G services Launch of data products Data as a % of revenue 11% 60% SMS revenue Capex as % of revenue BTS Rollout H2 H Dec-07 Dec-08 Dec-09 Dec-10

25 Closing remarks Current market conditions Ongoing management of risks and precautionary measures Election update and local tensions Secession Sanctions Operational performance relatively unaffected Some reflection EBITDA margin target of 45% Capex investment strategy timing and payoff Organic growth M&A People Thanks and appreciation

26 Nazir Patel Financial overview Group Finance Director

27 Financial highlights Strong free cash flow growth Group summary: (ZAR bn) Reported Organic Strong underlying organic growth in key markets % % Rev +3% +14% ZAR strength dampened reported results Higher EBITDA margin mainly due to Nigeria, Iran and RSA OpEx +2% -7% EBITDA +10% +23% CapEx -37% -30% Strong free cash flow generated as EBITDA increased and capex reduced Dividend payout ratio increased to 55%, dividend yield 4%** 31.0 AFCF* +108% +134% % 41% 44% EBITDA margin 28% 28% 17% Capex / Rev * EBITDA Capex (approximates free cash flow) ** Based on share price of ZAR

28 Financial overview Zakhele All income statement t t numbers exclude Zakhele unless otherwise stated t Zakhele impact non-cash and in equity except for transaction costs Infrastructure Notional vendor finance ZAR 1,382m Donation ZAR 1,294m ESOP ZAR 171m sharing Transaction costs ZAR 126m Trading conditions Economic and trading conditions stabilised (but uncertain) 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 FX impact on capex, ZAR strength Regulatory MTR changes impacted revenue RSA 1 Mar 10 Nigeria 31 Dec 09

29 Key accounting considerations Change in ownership Zambia shareholding h reduced d from 97.8% to 90.0% 0% - Jun 10 Afghanistan shareholding reduced from 100% to 90.9% - Jun 10 Cyprus shareholding reduced from 51% to 50% - Nov 10 Put options Put options net impact: Nigeria 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) Taxation Group effective tax rate of 36.3% mainly due to: Disallowed expenses 2.3% STC on Group dividends 2.1% Withholding tax 2.5% Education tax (Nigeria) 1.3%

30 FX trends (average rate) ZAR strength severely impacted results USD: Local currency Rial ZAR NairaCedi ZARial Naira Cedi % -1% +12% -1% H1-08 YTD -08 H1-09 YTD -09 H1-10 YTD -10 ZAR: Local currency Rial Naira Cedi Naira Cedi Rial % % -18% H1-08 YTD -08 H1-09 YTD -09 H1-10 YTD -10

31 Revenue Strong organic growth impacted by strong ZAR Revenue (ZAR bn) Revenue breakdown (ZAR bn) +14% % LC ZAR NIG 16% 1% RSA 8% 8% IRA 42% 21% GHA 14% 0% NIG RSA IRA GHA Other 2010CR FX 2010 H2 H1 2010CR is at constant prior year FX rate Reported revenues adversely impacted by ZAR strength 2010 revenues at constant prior year FX rates would be 14% higher than prior year Revenue in key markets driven by strong subscriber growth Nigeria share of net adds above 60% RSA growth driven by prepaid and data revenue Iran growth driven by higher subscribers, data and SMS

32 Data revenue (excl sms) High growth across operations Data revenue (ZAR bn) +48% YOY growth rate % share of Group data revenue Other +100% 6% 0.2 Iran +100% 3% 0.3 Syria NM 5% 0.5 Nigeria +25% 8% Group data revenue grew by 48% from prior year RSA contributed 58% of Group total Packet switched data users increased from 6.6m to 9.2m 3G handsets up to 3m includes 1.6m smartphones, data devices on network 946k 4.2 * Business Solutions +33% 20% Nigeria revenue increased by 25%. 150k dongles and 40k 3G handsets sold in 2010 Iran revenue growth due to uptake in GPRS services (10.6m users) RSA +44% 58% 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 Syria revenue growth over 100% due to better value proposition for both pre- and postpaid market *Business Solutions included in other revenue in 2009

33 Interconnect Large reduction in MTR in Nigeria and RSA Group interconnect (ZAR bn) Cost Revenue MTR changes in Nigeria and RSA RSA peak rate dropped from ZAR 1.25 to ZAR 0.89 Nigeria peak rate dropped from 11.4 Naira to 8.2 Naira Interconnect revenue decreased 13% RSA revenue decreased 10% Margin % currency Nigeria revenue decreased 25% in local currency 28% Net interconnect margin increased from 28% to 32% Higher on-net net traffic offset some of the interconnect rate decline RSA prepaid on-net improved 7pts to 61% Nigeria total on-net net increased by 4pts to 83% 5.5 Margin % 32%

34 EBITDA Strong organic EBITDA growth EBITDA (ZAR bn) EBITDA breakdown (ZAR bn) % % % % % 24.2 LC ZAR NIG +24% +7% RSA +17% +17% IRA +67% +41% GHA +13% -4% NIG RSA IRA GHA Other 2010CR FX 2010 H2 H1 EBITDA margin 2010CR is at constant prior year FX rate Strong organic EBITDA growth in key markets 2010 EBITDA at constant prior year FX rates would be 23% higher than prior year Strong margin improvements (local currency) through focused cost control initiatives Overall strong subscriber growth positively impacted revenue Improvements in on-net traffic patterns

35 EBITDA margin Margin expansion in Nigeria, Iran and RSA EBITDA margin reconciliation (%) 41.1% NIG 0.7 RSA +3.4pts IRA GHA 2010CR is at constant prior year FX rate 1.3 Other 44.5% 2010CR 0.5 FX 44.0% pts Nigeria Nigeria EBITDA increased by 7% (LC 24%) due to Revenue growth on subscriber increase Decrease in interconnect cost Outsourced spares management resulted in impairment reversal e RSA RSA EBITDA growth due to Revenue increase, higher data and prepaid revenue Net interconnect t improved due to increased on-net call percentage Lower distribution cost Iran Iran EBITDA growth due to Revenue increase on strong subscriber growth Single vendor maintenance, marketing cost reduction Ghana Margin decreased by 1pt. Higher electricity and utility cost. Increased maintenance to improve quality Other Margin improvement in Afghanistan, Syria and Zambia. Margin deterioration in Sudan, Cameroon and Benin

36 CapEx Capex reduction in most operations CapEx (ZAR bn) 31.2 CapEx breakdown (ZAR bn) % % % % 8.5 LC ZAR NIG -46% -54% RSA -35% -35% IRA -44% -48% GHA +31% +19% % NIG RSA IRA GHA Other 2010CR FX 2010 H2 H1 Capex/Rev 2010CR is at constant prior year FX rate Positive spend below June authorised (ZAR 21.3bn) mainly due to 2009 peak capex spend Positive FX impact, ZAR 2.3bn Ongoing price book reductions Nigeria reduced capex in 2010 on core network and site rollout RSA reduced capex in 2010 on switch facilities, BSS (2G and 3G) and transmission (MW, VSAT etc) Iran reduced d spend on site rollout, prepaid systems (IN) and core network Ghana completion of switch centres and greater fibre rollout in 2010

37 CapEx guidance Significant capex reduction vs prior year ZAR m 2010 Authorised South and East Africa South Africa Other operations West and Central Africa Nigeria Ghana Other operations Middle East and North Africa Iran Syria Other operations Head office companies Total USD:ZAR USD:ZAR USD:ZAR 7.42

38 EBITDA - CapEx Strong free cash flow growth EBITDA - CapEx (ZAR bn) EBITDA - CapEx breakdown (ZAR bn) % % % % % LC ZAR NIG +98% +73% RSA +89% +89% IRA NM NM GHA NM NM NIG RSA IRA GHA Other 2010CR FX 2010 H2 H1 % revenue 2010CR is at constant prior year FX rate Strong organic operational growth Low capex spend, led to high adjusted free cash flow Nigeria EBITDA increase, capex decrease after 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

39 Interest and tax Lower interest charge and increase in effective tax rate Net finance cost (ZAR m) Net interest paid Net forex losses Functional currency losses/(gains) (2 442) Put options 22 (701) Functional currency loss reduced due to cession of Iran loans to MTN Dubai 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 closing rate New put option in Afghanistan Total Tax (ZAR bn) % % Eff rate % STC & other WHT Def tax Normal tax Deferred tax higher than prior year due to Significant capex spend in prior year Functional currency impact on Iran loans in the prior year Year-on-year rate increased due to Additional STC on interim dividend Lower investment allowance in Nigeria Impact of reduced put option credit on pre-tax income

40 AHEPS (excl Zakhele) Increased adjusted headline earnings per share AHEPS (ZAR cents) Adjusted EPS (excl Zakhele) increased by 20.5% to cents Strong earnings conversion from operational performance despite FX and higher tax charge H2 H1 ZAR cents Variance % Attributable earnings per share (Gain)/loss on disposal of non-current assets (7.2) (Reversal of)/impairment of PPE and other non-current assets (8.5) Basic headline earnings per share Reversal of the put options in respect of subsidiaries (13.6) (48.9) 72.2 Adjusted headline earnings per share

41 Net debt Group in net cash position 13% ZAR bn Repayment schedule (ZAR bn) % % 56% Gross debt 35, Holdco's and RSA Iran Other 8% 11% Nigeria Syria >2014 USD 2.3bn of non-recourse debt closed in 9% 2010, partially drawn 49% Cash 36,2 Unproductive debt of ZAR 5.6bn remains due to recap of Dubai Gross intercompany loans (excl holding companies and SA) total ZAR 11.7bn 23% Net cash 0.9 Short term liabilities include ZAR 2.0bn from the capital market and ZAR 3.0bn due under the international syndication Syrian cash to be used in BOT conversion

42 Income statement ZAR bn 2010 (excl Zakhele) 2010 (incl Zakhele) 2009 Variance % (excl Zakhele) Revenue EBITDA EBITDA Margin % 44.0% 41.5% 41.1% 1% +2.9pts Depreciation Amortisation Profit from operations Net finance cost Profit before tax Income tax expense Profit after tax Non-controlling interests Attributable profit Effective tax rate 36.3% 40.1% 33.4% -2.9pts

43 Statement of financial position ZAR bn Non-current assets Property, plant & equipment Goodwill and other intangible assets Other non-current assets Current assets Bank balances Restricted cash Other current assets Assets of disposal group classified as held for sale Total assets Capital and reserves Non-current liabilities Borrowings Deferred taxation and other non-current liabilities Current liabilities Non interest-bearing liabilities Interest-bearing liabilities Equity and liabilities Net debt Net debt/ebitda USD:ZAR

44 Statement of cash flows ZAR bn Net cash generated from operations Net interest paid Taxation paid Dividends paid Cash inflows from operating activities Acquisitions of PPE (excl software) Acquisition of intangible assets Other investing activities Cash outflows from investing activities Cash outflows from financing activities Net movement in cash and cash equivalents Cash and cash equivalents at the beginning of the year Realised losses on bank accounts 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)

45 Message from MTN Group chairman Cyril Ramaphosa

46 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 Operations Population 68m 344m 552m Market cap (ZAR bn) 58 (31 March 2000) 103 (31 Dec 2005) 253 (31 Dec 2010) Revenue (ZAR bn) EBITDA Subs(m) 2, ,7

47 Welcome to Sifiso Dabengwa History at MTN With MTN for 12 years Joined MD MTN SA Infrastructure sharing CEO MTN Nigeria COO MTN Group Previous roles Executive Director at Eskom responsible for sales, customer service, electrification and distribution technology Consulting electrical engineer in the building services industry Technical management roles in the mining and railway sectors Education BSc Electrical Engineering MBA degree

48 Looking ahead Sifiso Dabengwa Group COO and CEO designate

49 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 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 Optimising efficiencies Continued evaluation of individual markets for infrastructure sharing opportunities of 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 processes Increased centralisation of procurement activities and rationalisation of suppliers Shared services and outsourcing

50 Looking forward (cont) Rollout Execute network investments t 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 Shareholder returns Continue to investigate options to improve sustainable returns to shareholders Dividend payout ratio policy of 55% Regulatory Continued engagement with authorities ensure the social and commercial success of the telecommunications sector

51 Subscriber guidance 2011 Net additions guidance for South Africa 2,000 Nigeria 4,200 Ghana 390 Iran 3,350 Syria 600 Rest 6,385 16,925

52 Capex guidance (ZAR mn) Authorised 2011 South and East Africa South Africa Other operations West and Central Africa Nigeria Ghana Other operations Middle East and North Africa Iran Syria Other operations Head office companies 861 Total % 5% 16% 2G 17% 3G 19% 17% Cable/fibre Core and other IT & VAS Physical infrastructure 5% 6% 11% 5% 3% 22% 48% 54% 27% 4% 9% 6% 21% 10% 8% 54% 49% 17% 7% 22% 8% 4%

53 Thank you Questions

54 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 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 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 part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever.

55 Annexures

56 Nigeria - Financial Strong free cash flow growth achieved Nigeria YTD financial: (ZAR bn) Reported Organic % +5% Rev +1% +16% Significant growth in AFCF for Nigeria in 2010, following consistent cash flow generation in prior years EBITDA increased by 7.1% (LC 23.8%) OpEx 21.1 EBITDA 4.7 CapEx +9% -6% Revenue growth due to subscriber increase Cost optimisation +7% +24% programmes -54% -46% Higher on-net traffic Reduced capex in 2010 on core network and site rollout 16.4 AFCF +73% +98% % 59% 63% EBITDA margin 30% 31% 14% Capex / Rev

57 Nigeria NGN bn Revenue Airtime and subscription 92.5 Revenue Increase in subscribers Increase in dongles and 3G handsets Data 4.8 Reduction in interconnect rate Interconnect (12.6) Other Direct network and operating costs Increase in BTS sites % Growth 16.0% EBITDA Revenue 95.3 Selling and distribution (12.5) Interconnect and roaming costs 11.1 Selling and distribution FIFA promotional costs Commission increase in line with revenue EBITDA margin Improvement, on-net ratio up Other (9.9) % Growth 23.9% EBITDA margin 63.0%

58 RSA Financial* Strong free cash flow growth achieved RSA YTD financial: (ZAR bn) Reported Organic Consistent generation of AFCF in prior years, with 2010 increasing by 89% % % 35.8 Rev +8% +8% EBITDA increase Revenue increase, higher data and prepaid revenue OpEx -4% -4% Interconnect rate reduction, increased on-net call percentage Lower distribution cost due to distribution through internal service providers EBITDA CapEx AFCF +17% +17% p -35% -35% +89% +89% Reduced capex in 2010 on switch facilities, BSS (2G and 3G) and transmission (MW, VSAT etc) Dec 2008 Dec 2009 Dec % 31% 34% EBITDA margin 15% 18% 11% Capex / Rev * Excl Network Solutions and Business Solutions

59 RSA* ZAR bn Revenue 2010 Revenue Higher data and prepaid revenue Higher postpaid revenue but lower ARPU Out-of-bundle usage Airtime and subscription 1.4 Growth in hybrid and telemetry base Data 1.1 Drop in interconnect rates Interconnect (0.7) Other % Growth 8.2% EBITDA Revenue 2.7 Interconnect and roaming costs 0.9 Other (1.8) % Growth 17.3% EBITDA margin 34.1% Direct network and operating costs Higher rent and utilities Higher maintenance Handsets and accessories Volume increase Average cost: prepaid down, postpaid up Selling and distribution Marketing higher due to FIFA Lower distribution cost EBITDA margin Higher on-net traffic offset some of the interconnect rate decline * Excl Network Solutions and Business Solutions

60 Iran - Financial* Strong free cash flow growth achieved Iran YTD financial: (ZAR bn) +21% Reported Organic Positive AFCF of ZAR 2.1bn Strong cash flow generation on lower capex and higher revenue % Rev +21% +42% Rev share OpEx EBITDA -5% -21% -14% -34% +41% +67% Revenue increase on strong subscriber growth and stable ARPU s 2043 BTS sites in 2009 v 1284 in 2010 Expansion of prepaid system (IN) and core network in CapEx -48% -44% AFCF NM NM % 35% 41% EBITDA margin Capex / Rev 55% 43% 18% * at 49% proportion

61 Iran* IRR bn Revenue Airtime and subscription Data 146 Interconnect 655 Other % Growth 42.0% EBITDA 2010 Revenue Increase in subscribers Stable ARPU Uptake of GPRS Selling and distributionib i Decreased marketing spend Commission in line with revenue Direct network operating costs Single vendor maintenance Revenue Selling and distribution (26) Interconnect and roaming costs (477) Other (1 185) % Growth 66.6% EBITDA margin 41.2% * at 49% proportion

62 Ghana - Financial High 2010 infrastructure investment Ghana YTD financial: (ZAR bn) Reported Organic High capex spend in 2010 Completion of the switch centres 6.0-5% % 5.7 Rev 0% +14% High fibre rollout in 2010 EBITDA increase by 13% in local currency OpEx -3% -17% Revenue growth following strong subscriber growth and success of MTN Zone EBITDA -4% +13% EBITDA margin decreased by 0.3pts CapEx +19% +31% AFCF NM NM % 45% 44% EBITDA margin Capex / Rev 32% 46% 54%

63 Ghana GHC m Revenue Airtime and subscription 104 Data 12 Interconnect 5 Other % Growth 14.1% EBITDA Revenue 137 Selling and distribution (25) Interconnect and roaming costs (24) Other (30) % Growth 13.3% EBITDA margin 44.5% Revenue Increase in subscribers 3G uptake Direct network operating costs Increased electricity i and utility cost Increased maintenance to improve quality Interconnect and roaming On-net ratio decreased from 86% to 83% Selling and distribution FIFA promotion Media inflation cost driven by competition Cost of handsets and accessories Increased handset cost due to uptake of bundled offers (to drive data and 3G) EBITDA margin Down by 0.3pts due to higher direct network cost

64 SYRIA - Financial Strong free cash flow growth achieved Syria YTD financial: (ZAR bn) Reported Organic AFCF increased by 71% in % +8% Rev -3% +10% 3.1 Rev share -3% -19% EBITDA growth Revenue growth due to increase in subscribers, sms and data bundles Selling and distribution cost decrease on commission rate reduction Capex down following high spend in OpEx +20% +11% EBITDA +14% +31% CapEx % -37% AFCF % +86% % 20% 24% EBITDA margin Capex / Rev 15% 10% 6%

65 Syria SYP bn Revenue Airtime and subscription 3.2 Data 1.1 Interconnect 0.3 Other (0.4) % Growth 10.7% EBITDA Revenue 4.2 Revenue Increase in subscribers SMS and data bundles Direct network operating costs Revenue share Interconnect and roaming Increased international calls (economic growth) Selling and distribution Commission rate decrease Handsets and accessories Increase in 3G handset sales Selling and distribution costs 0.2 Interconnect and roaming (0.4) Other (1.4) % Growth 33.8% EBITDA margin 23.7%

66 Net debt ZAR m Cash and Interest Net debt Net debt cash bearing Intercompany /(cash) / (cash) equivalents liabilities* eliminations South & East Africa (4 725) (12 971) (3 146) (783) RSA (3 786) (11 726) (3 612) ( 1 852) Other operations (939) (1 245) West & Central Africa (9 786) (628) Nigeria (8 480) Ghana (168) - - (168) (469) Other operations (1 138) (628) Middle East & North Africa (7 965) (5 928) (6 789) (5 069) Iran (2 874) (3 195) (2 309) (1 350) Syria (3 791) - - (3 791) (3 331) Other operations (1 300) (2 733) (688) (388) Head office companies (13 756) (2 992) Total (36 232) (22 519) (905) * Including long- and short-term borrowings and overdrafts

67 Exchange rates analysis Average (EBITDA) Closing % var % var Rand per USD Nigerian Naira per USD (1) (1) Nigerian Naira per ZAR (16) (13) Iranian Rials per USD (4) (4) Iranian Rials per ZAR (17) (16) Ghanaian Cedis per ZAR (18) (16) Syrian Pounds per ZAR (14) (15)

68 MTN data sheet part 1 Market overview Group SEA WECA MENA Nigeria RSA Ghana Syria Iran Population (m) Mobile penetration (%) Number of operators Operational data Subscribers ( 000) ARPU (USD) Outgoing MOU (mins) Market share (%) Operational data (ZAR bn) Revenue EBITDA EBITDA margin (%) CAPEX Depreciation Amortisation

69 MTN data sheet part 2 (SEA) Sub Total RSA Botswana Zambia Swaziland Uganda Rwanda Shareholding (%) Licence period (years) Market overview Population (m) Mobile penetration (%) Market position Number of operators Market size (m) (2015) Operational data Subscribers ( 000) ARPU (USD) Market share (%)

70 MTN data sheet part 3 (WECA) Sub Total Nigeria Ghana Cameroon Congo B Benin G. Bissau G. Conakry Liberia Cote d Ivoire Shareholding h (%) Licence period (years) Market overview Population (m) Mobile penetration (%) Market position Number of operators Market size (m) (2015) Operational data Subscribers ( 000) ARPU (USD) Market share (%)

71 MTN data sheet part 4 (MENA) Sub Total Sudan Iran Afghanistan Cyprus Syria Yemen Shareholding (%) Licence period (years) (BOT) 15 Market overview Population (m) Mobile penetration (%) Market position Number of operators Market size (m) (2015) Operational data Subscribers ( 000) ARPU (USD) Market share (%)

72 MTN Group Limited Final audited results for year ended d 31 December 2010