econet wireless zimbabwe fy 2016 financial results presentation

Strategicandopera.onaloverview

DouglasMboweniChiefExecu5veOfficer

Financialoverview

RoyChimanikireFinanceDirector

Outlook

DouglasMboweniChiefExecu5veOfficer

StrategicandOpera.onalOverviewDouglasMboweniChiefExecu5veOfficer

Strategic Overview

1.KEYSTATISTICSWehaveachievedsomekeymilestones

2.OURBUSINESSISINTRANSITIONResiliencethroughinnova.on

3.OPERATINGENVIRONMENTResilienceinaVola.le,Uncertain,ComplexandAmbiguousenvironment

Total Telco Revenues and Traffic

4.OPERATINGENVIRONMENTEconomicHeadwinds

GovernmentRevenues(US$bn)

5.INDUSTRYOVERVIEWRegulatoryheadwinds

6.INDUSTRYTRENDSStableMarketShare

VoiceTrafficMarketShare Mobiletrafficevolu.onminutes(m) RevenueShare

•  Econetremainsthelargestoperatorintermsoftrafficandtrafficsharecon5nuestogrow•  Econetrevenueshareremainsstrongandstable

Source:POTRAZReports

7.BUSINESSFOCUSAREASCustomercentricitydrivinginnova.on

CUSTOMER

8.MARKETPRESENCE&DISTRIBUTIONFOOTPRINTIncreasedcustomertouchpoints

26,000agents+countrywide.

250+brandedshops,includingcontainerstoincreasecustomercontactpoints.

35,000+individualssellingair5merecharge

cardsna5onwide

Inaddi5on,wehaveover1,100greenkioskscountrywide.

9.OURSTRATEGYFORGROWTHAcceleratedeploymentandscalingofinnova.ons

•  Premierpaymentplaaorm•  Loandisbursementsand

seclements•  Increaseremicances•  Introducenewmobile

insuranceservices•  PayrollServices

•  Affordablesmartphones•  BroadbandtotheHome•  Increaseddatausage

throughaffordableandinnova.veapplica.ons

•  Onlineselling&buying•  Digitalmediacontent•  PayTv•  Onlineeduca.on

1.MOBILEFINANCIALSERVICES 2.BROADBAND 3.MEDIA&E-COMMERCE

GROW BUILDGROW

Opera.onalHighlights

9.CUSTOMERGROWTHSustainedsubscribergrowthandstrongmarketshare

SubscriberGrowth

Comments•  Con5nuedBroadbandandmobilemoneygrowth•  Productdiversifica5on

ValueShareQ42015

10.ECOCASHSustainedgrowth

Numberofagents(thousands)

•  EcoCashisfastbecomingthepremiermobilepaymentsystemascustomersembracetheconvenienceandefficiencyoftheservice

•  Interna5onalremiManceshelpingbringcashintosystem•  Opportuni5esinnewusecases•  Cashlesspaymentsisana5onalagenda,EcoCashhasbecomemorepervasiveinZimbabweasaonestopshopforallfinancialservices–moneytransfers,remiMances,dailypayments,savingsandinsurance•  EcoCashleadsthewayinbalancingfinancialtransac5onsandmoneydistribu5onthrougha‘sharedeconomy’model

Customers(millions) Transac.onValue(US$b)

11.BROADBANDStronggrowthinthelast3years

Customers(millions)

•  Mobilebroadbandusershavemorethandoubledinthelast3years•  Con5nuedgrowththroughnewdemandcreatedbynewformsofdatause•  Fasterconnec5vity•  Mone5sa5onofcontentservices(Ownai,Kwese,RuzivoandEcoschool)

BroadbandRevenueGrowth(m)

42

72

103

110

FinancialOverviewRoyChimanikireFinanceDirector

1.FinancialHighlightsSustainingvalue

TotalRevenue(US$m)

EBITDA(US$m)

746641

Feb.15 Feb.16

286

238

Feb.15 Feb.16

DataRevenue(US$m)

CAPEX(US$m)

103113

Feb.15 Feb.16

125

83

Feb.15 Feb.16

Subscribers(m)

7387

Feb.15 Feb.16

9.1910.02

Feb.15 Feb.16

MobileFinancialServices(US$m)

2.RevenueHighlightsDiversifica.onthroughinnova.on

•  Impactofthe35%reduc5onintariffsimplemented1stJanuary2015•  Non-voiceCAGR30.4%•  SMSrevenueincreasedrivenbyreposi5onedcustomervalueproposi5on•  ARPUdeclinedfrom$8.15to$6.84,largelyduetothedeclineinvoicerevenues

RevenueMovement(US$m)

746

641-15.9%

1.3% 1.1% 1.9%

-2.5%

Feb.15 Voice Data SMS MobileFinancialServices

Other Feb.16

%Decline%Growth

2a.DataRevenueCustomers&Usagedrivinggrowth

DataRevenue(US$m) DataSubscribers(m) DataTraffic

21

33

56 5224

39

4760

45

73

103113

Feb.13 Feb.14 Feb.15 Feb.16

H1 H2

CAGR36.2%

CAGR62.8%

•  AMrac5vebundlepricingdrivingdatatraffic•  IncreasedFibre-to-the-home(FTTH),LTEandEconetWi-Fi

Zonesofferingincreasedspeedandseamlessconnec5vitytobroadbandcustomers

•  The launch of sub-US$ 50 smart devices further drivingdatausagegrowth

DataContribu.on

113m

18%ofRevenue

3.18

4.305.30

7.12

Feb.13 Feb.14 Feb.15 Feb.16

CAGR30.8%

2b.EcoCashRevenueFocusonfinancialinclusion

EcoCashSubscribers

3.1

5.3

7.35.7

Feb.13 Feb.14 Feb.15 Feb.16

EcoCashRevenue(US$m)

8

33

61

73

Feb.13 Feb.14 Feb.15 Feb.16

CAGR107%

Transac.onValue(US$b)

0.7

3.1

5.5

6.6

Feb.13 Feb.14 Feb.15 Feb.16

•  CashshortagesdrivingEcoCashgrowth.•  Averagetransac5onvaluenowat$25(PY$26)•  48%growthinnumberofEcoCashAgentsfrom

17.9k to 26.5k to support the growth insubscribers

•  Mobile payments account for 88% na5onalpayments volume Source: 2016 Monetary Policy Statement;POTRAZQ42016SectorReport

•  98% ofmobilemoney value transacted on theEcoCashplakormSource:POTRAZQ42016SectorReport

EcoCashContribu.on

73m

11%ofRevenue

2.1

3.2

4.2

5.8

Feb.13 Feb.14 Feb.15 Feb.16

CAGR40.3%

CAGR111.3%

EcoCashGPMargin(%)

7%

38% 39% 40%

Feb-13 Feb-14 Feb-15 Feb-16

3.TotalCostsCostmanagementinatoughenvironment

TotalCosts(US$m)

•  Con5nuouscostop5misa5on,resultedinreducedopera5ngcosts

•  Retrenchmentcostof$7.5millionincurredinH2•  Pressureoncostsduetoopera5ngenvironment:

-  IncreaseinUSFfrom0.5%to1.5%-  Costofalterna5vepower/energyofaboutUS$7millionannuallyinaddi5ontocapexcostofaboutUS$55million,

todate,onalterna5vepowersolu5ons

CostReduc.on(US$m)

476

420

Directcosts6.1%

Indirectcosts5.7%

Feb.15 Directcosts Indirectcosts Feb.16

186216

250212

206220

226

208392

436476

420

Feb.13 Feb.14 Feb.15 Feb.16

H1 H2

*Prioryearinbrackets

4.ProfitabilitySustainingprofitabilityinatoughenvironment

EBITDA(US$m) EBITDAMargin(%)

38% 37%

Feb.15 Feb.16

•  EBITDAdeclinedueto:-Depressedrevenueperformanceduetopricereduc5ons-Increasedcontribu5onfromlowermarginproducts

•  Costsavingsreducedthenega5veimpactofrevenuedecline

PAT(US$m)

155

122

131

116

286

238

Feb.15 Feb.16

H1 H2

50

24

20

16

70

40

Feb.15 Feb.16

H1 H2

5.CapitalInvestmentInves.ngforthefuture

CAPEX(US$m)

148 144125

83

138

21%19%

17%

13%

0%

5%

10%

15%

20%

25%

-

50

100

150

200

250

300

Feb.13 Feb.14 Feb.15 Feb.16

PPE Opera5nglicencerenewal *Capexintensity

Deprecia.on(US$m)

72

98

126137

10%

13%

17%

21%

-3%

2%

7%

12%

17%

22%

-

20

40

60

80

100

120

140

160

180

Feb.13 Feb.14 Feb.15 Feb.16Deprecia5on Deprecia5on/Revenue

•  Decliningcapexintensityduetotherobustinvestmentmadeinpreviousyears•  Investmentfocusison:

-Investmentin4G/LTEandnetworkmordenisa5ontodeliverfasterbrowsingspeeds-Con5nuedinvestmenttoincreasenetworkcapacity,coverageandquality

•  Rela5velymodestincreaseindeprecia5onchargeconsistentwithreducedCapexspend•  Deprecia5onishighduetoheavycapexposthyperinfla5on

6.BorrowingsDecliningdebttoequityra.os

DebttoEquity%DebtEvolu.on(US$m)

242

207

Feb.15 Feb.16

36%

31%

Feb.15 Feb.16

NetFinanceCost(US$m)

3633

Feb.15 Feb.16

7.ConclusionKeypriori.es

Increasestakeholder

value

Decreasecosts

Increaseand

diversifyrevenues

• Con.nuedfocusoncostop.misa.oncri.caltomaintainandgrowprofitsaswellassustainmargins

• Strongbalancesheettosupportnewproducts

• Focusonimprovingnetworkqualityandincreasingdatacapacitytosupportnewrevenuestreams

• Sustainingandimprovingfreecashflow

CostOp.misa.on

FinancialPosi.on

CAPEX

Cash

• Maintainingrevenueinatoughopera.ngmarket• GrowingMFSandDatarevenues• Focusonproductandrevenuediversifica.on

Revenue

Outlook

13.OUTLOOKTransi.oningtoquad-play

VOICE&TEXT BROADBAND MFSMEDIA&

E-COMMERCE

Declining voice revenue to be supported by •  Micro segmentation and roll out

of appropriate incentives and packages

•  Smart tariffing strategy driven by data analytics and customer insights

Acceleration of 4G /LTE coverage •  Affordable smartphones

Bundles for specific Over The Top (OTT) services •  Broadband into the home •  Drive usage through affordable apps

Enhance the significance of MFS as an alternative to cash payments •  The growth of the informal market-

80%+ of local transactions in cash •  International remittances and

partnerships

•  Onlineselling&buying•  Digitalmediacontent•  PayTv•  Onlineeduca.on

COMPETE GROW GROW BUILD

RESILIENCETHROUGHROBUSTINFRASTRUCTURE,INNOVATION&COSTOPTIMISATION

Appendices

US$ 000's Feb-16 Feb-15 Variance (%) Revenue 640,989 746,183 -14% EBITDA 238,420 285,645 -17% Depreciation, amortisation & impairment (136,556) (126,289) -8% Operating profit 101,864 159,356 -36% Net finance costs (33,403) (36,011) 7% Profit before tax 68,461 123,345 -44% Income tax expense (28,261) (53,136) 47% Profit after tax 40,200 70,209 -43% Non-controlling interests 163 49 -233% Attributable profit 40,363 70,258 -43% EBITDA Margin 37% 38% -1% PAT Margin 6% 9% -3%

StatementofFinancialPerformance

MEDIA&E-COMMERCE

US$ 000's Feb-16 Feb-15 Variance (%) ASSETS Property, plant & equipment 834,870 883,188 -5% Other non-current assets 121,273 129,967 -7% Current assets 240,761 243,337 -1% TOTAL ASSETS 1,196,904 1,256,492 -5% EQUITY & LIABILITIES Share capital 40,764 40,764 0% Other reserves 2,546 5,894 -57% Retained earnings 614,225 614,112 0% Minority interest 4,362 4,525 -4% Total Equity 661,897 665,295 -1% Long term interest-bearing liabilities 112,343 165,758 -32% Deferred taxation 112,221 120,458 -7% Other non-current liabilities 3,487 3,690 -6% Current liabilities 306,956 301,291 2% Total Liabilities 535,007 591,197 -10% TOTAL EQUITY & LIABILITIES 1,196,904 1,256,492 -5%

StatementofFinancialPosi.on

MEDIA&E-COMMERCEUS$000's Feb-16 Feb-15 Variance (%)

Cash generated from operations 244,681 226,962 8% Tax paid (25,566) (51,421) 50% Net cash from operating activities 219,115 175,541 25% Acquisition of property, plant and equipment & Intangibles (82,848) (125,387) 34% Other investing activities (8,985) (17,729) 49% Cash used in investing activities (91,833) (143,116) 36% Cash used in financing activities (122,806) (8,517) -1342% (Decrease)/Increase in cash & cash equivalents 4,476 23,908 -81% Cash and cash equivalents at the beginning of year 95,239 71,331 34% Cash & cash equivalents at the end of the year 99,715 95,239 5%

StatementofCashFlows

Disclaimer

Neither the Company nor any of its respective subsidiaries, advisors or representatives shall haveany liability whatsoever for any loss howsoever arising from any use of this presentation or itscontents or otherwise arising in connection with this presentation.

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, as these can vary with timeresulting in company results, plans and objectives differing materially from those expressed in thisdocument.

Absent independent verification, no representation or warranty express or implied is made as toand no reliance should be placed on the fairness, accuracy, completeness or correctness of theinformation or opinions contained herein.

The Company shall not be liable for any claims arising from any reliance on this document topurchase or subscribe for any securities or entering into any contracts or commitment whatsoever.

THANKYOU