TIDMAAF
RNS Number : 3477Y
Airtel Africa PLC
12 May 2021
Airtel Africa plc
Results for year ended 31 March 2021
12 May 2021
Continued strong revenue growth, increased profitability and
cash flow, and continued deleveraging
.
Highlights
-- Reported revenue grew by 14.2% to $3,908m, with Q4'21 reported revenue growth of 15.4%.
-- Constant currency underlying revenue growth was 19.4%, with
Q4'21 growth of 21.7%. Growth was recorded across all regions:
Nigeria up 21.9%, East Africa up 23.5% and Francophone Africa up
10%; and across key services, with revenues for voice up 11.0%,
data up 31.2% and mobile money up 35.5%.
-- Underlying EBITDA was $1,792m, up 18.3% in reported currency,
and growing 25.2% in constant currency.
-- Underlying EBITDA margin was 46.1%, adding 181 basis points
(210 basis points higher in constant currency). Underlying EBITDA
margin for Q4'21 was 47.7%, an increase of 389 basis points in
constant currency.
-- Operating profit increased 24.2% to $1,119m in reported
currency, and by 32.8% in constant currency.
-- Free cash flow was $647m, up 42.8% on the prior year.
-- Basic EPS was 9.0 cents, down 12.6%, largely due to prior
year exceptional items and a one-off derivative gain. Excluding
these, basic restated EPS rose 44.5%. EPS before exceptional items
was 8.2 cents.
-- Our customer base grew by 6.9% to 118.2 million, with
increased penetration across mobile data (customer base up 14.5%)
and mobile money services (customer base up 18.5%). The recent
slowdown in customer base growth has been due to new SIM
registration regulations in Nigeria.
-- The Board has recommended a final dividend of 2.5 cents per
share, making the total dividend for FY21 4.0 cents per share.
Alternative performance measures (4) GAAP measures
(Year ended) (Year ended)
-------------------------------------------------------------- ------------------------------------------------------
Description March-21 March-20 Reported Constant Description March-21 March-20 Reported
currency currency currency
---------------- ---------------
$m $m change change $m $m change %
% %
---------------- --------- --------- ---------- ---------- --------------- --------- --------- ---------------
Underlying
revenue
(1) 3,888 3,422 13.6% 19.4% Revenue 3,908 3,422 14.2%
---------------- --------- --------- ---------- ---------- --------------- --------- --------- ---------------
Underlying Operating
EBITDA 1,792 1,515 18.3% 25.2% profit 1,119 901 24.2%
---------------- --------- --------- ---------- ---------- --------------- --------- --------- ---------------
Underlying
EBITDA 181 210 Profit before
margin 46.1% 44.3% bps bps tax (2) 697 598 16.7%
---------------- --------- --------- ---------- ---------- --------------- --------- --------- ---------------
Profit after
Free cash flow 647 453 42.8% tax (2) 415 408 1.8%
---------------- --------- --------- ---------- ---------- --------------- --------- --------- ---------------
EPS before
exceptional Basic EPS
items (cents) 8.2 7.3 12.8% (cents) 9.0 10.3 (12.6%)
---------------- --------- --------- ---------- ---------- --------------- --------- --------- ---------------
EPS before Basic EPS
exceptional (cents)
items (cents) -restated
- restated (3) 8.2 6.9 18.2% (3) 9.0 9.8 (8.4%)
---------------- --------- --------- ---------- ---------- --------------- --------- --------- ---------------
( (1) Underlying revenue excludes one-time exceptional revenue
of $20m relating to a settlement in Niger in the year ended 31
March 2021. (2) PBT and PAT growth lagged operating profit growth
largely due to one-off items incurred in the same period in the
prior year. Excluding the benefit of exceptional items and a
one-off derivative gain in the prior period, PBT and PAT increased
by 40.7% and 47% respectively. Please refer to page 4 for
explanations of GAAP measure movements. (3) In July 2019, after the
announcement of Initial Public Offering (IPO), the company issued
676,406,927 new shares. EPS has been restated to reflect the
position if all the shares as of 31 March 2021 been issued on 1
April 2019, for a like-for-like comparison. (4) Alternative
performance measures (APM) are described on page 49.
Raghunath Mandava, chief executive officer, on the trading
update:
"In these challenging times I want to say a huge thank you to
all our employees, our business partners, and governments and
regulators who have supported us, and in turn facilitated our
continued support to the economies and communities we serve.
Our performance has been strong, with reported growth of 13.6%
in underlying revenue and 18.3% in underlying EBITDA, and constant
currency growth of 19.4% and 25.2% respectively. Contributions to
this growth came across all regions, with particular improvement in
Francophone Africa, and across all our major services, with mobile
money, data and voice each posting double-digit revenue growth.
Our customer base also grew strongly for most of the year with
new customer registration requirements in Nigeria stemming our
onboarding of new customers in the final quarter, and these
restrictions were lifted in second half of April.
In line with our strategy of unlocking value in our mobile money
business, we will soon welcome two new minority investors (The Rise
Fund and Mastercard) in agreed transactions which value this part
of our business at $2.65bn, as well as bringing $300m into the
Group. We have also agreed to sell more of our tower portfolio,
yielding yet more cash for the business.
The Covid pandemic had eased during the course of the year,
however, more recently we have seen a surge in cases. So far this
has had no adverse impact on the business, though we will continue
to monitor the situation closely.
In these times, our purpose of transforming lives has never been
more critical. It has always meant more than simply providing
mobile and financial services; it is about our drive to create a
sustainable future. To that end, this year the leadership team has
worked to create our sustainability framework, outlining the role
we can play and the focus areas where we can make the biggest
difference for each of our business, our people, our community, and
our environment. We will report back with our goals later this year
and deliver our first sustainability report in 2022.
The combination of bringing connectivity to underpenetrated
mobile markets and improving financial inclusion through banking
the unbanked, across our territories of operation, together provide
us with a sizeable runway of sustainable profitable growth
potential, and one we remain very confident of delivering."
About Airtel Africa
Airtel Africa is a leading provider of telecommunications and
mobile money services, with a presence in 14 countries in Africa,
primarily in East Africa and Central and West Africa.
Airtel Africa offers an integrated suite of telecoms solutions
to its subscribers, including mobile voice and data services as
well as mobile money services, both nationally and internationally.
We aim to continue providing a simple and intuitive customer
experience through streamlined customer journeys.
Enquiries
Airtel Africa - Investor Relations
Pier Falcione +44 7446 858 280
Morten Singleton +44 7464 830 011
Investor.relations@africa.airtel.com +44 207 493 9315
Hudson Sandler
Nick Lyon
Bertie Berger
airtelafrica@hudsonsandler.com +44 207 796 4133
Conference call
The management team will host an analyst and investor conference
call / webcast at 1:00pm UK time (BST), on Wednesday 12 May 2021,
including a Question and Answer session.
To participate in the conference call and webcast, and to ask
questions, please register before the event using the following
link:
https://www.diamondpass.net/8501685
Please note that you will only receive your dial in number and
link to the webcast upon registration.
Key financial information
Description Unit Year ended Quarter ended
of measure
----------------- ------------------------------------------ ----------------------------------------
Mar-21 Mar-20 Reported Constant Mar-21 Mar-20 Reported Constant
currency currency currency currency
change change change change
% % % %
----------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Profit and loss
summary
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Underlying
revenue
(1) $m 3,888 3,422 13.6% 19.4% 1,038 899 15.4% 21.7%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Voice revenue $m 2,083 1,970 5.8% 11.0% 547 510 7.2% 12.8%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Data revenue $m 1,157 930 24.3% 31.2% 315 253 24.2% 31.7%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Mobile money
revenue
(2) $m 401 311 29.1% 35.5% 110 83 32.7% 38.7%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Other revenue $m 347 302 14.9% 20.0% 91 77 18.1% 23.7%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Expenses $m (2,107) (1,924) 9.5% 14.5% (544) (505) 7.7% 12.9%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Underlying
EBITDA
(3) $m 1,792 1,515 18.3% 25.2% 495 397 24.7% 32.4%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Underlying
EBITDA 181 210 354 389
margin % 46.1% 44.3% bps bps 47.7% 44.1% bps bps
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Depreciation and
amortization
(4) $m (681) (605) 12.5% 17.2% (176) (152) 16.0% 21.1%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Operating
exceptional
items (5) $m 14 (4) (479.9%) (399.8%) 1 - 0.0% 0.0%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Operating profit
(6) $m 1,119 901 24.2% 32.8% 319 244 30.7% 40.3%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Net finance
costs $m (423) (372) 13.5% (104) (147) (29.5%)
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Non-operating
exceptional
items $m - 69 (100.0%) - - 0.0%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Profit before
tax $m 697 598 16.7% 215 97 121.6%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Tax $m (318) (237) 34.0% (82) (28) 197.3%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Tax -
exceptional
items $m 36 47 (24.3%) 21 8 179.9%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Total tax charge
(7) $m (282) (190) 48.5% (61) (20) 204.4%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Profit after
tax (8) $m 415 408 1.8% 154 77 100.0%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Non-controlling
interest $m (76) (38) 100.8% (22) (12) 74.6%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Profit
attributable
to owners of
the
company -
before
exceptional
items $m 308 261 18.0% 121 57 111.7%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Profit
attributable
to owners of
the
company $m 339 370 (8.4%) 132 65 104.8%
----------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
EPS - before
exceptional
items cents 8.2 7.3 12.8% 3.2 1.5 111.8%
EPS - before
exceptional
items -
restated
(9) cents 8.2 6.9 18.2% 3.2 1.5 111.7%
----------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Basic EPS cents 9.0 10.3 (12.6%) 3.5 1.7 105.0%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Weighted average
no of shares million 3,758 3,586 4.8% 3,756 3,758 (0.1%)
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Capex $m 614 642 (4.3%) 211 246 (14.2%)
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Operating free
cash flow $m 1,178 873 34.9% 284 151 87.9%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Free cash flow $m 647 453 42.8% 181 65 179.4%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Net debt $m 3,530 3,247 3,530 3,247
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Leverage (net
debt to
underlying
EBITDA) times 2.0x 2.1x 2.0x 2.1x
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Return on
capital
employed % 16.5% 14.0% 2.5% 16.4% 13.7% 2.7%
----------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Operating KPIs
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
ARPU $ 2.8 2.7 2.4% 7.7% 2.9 2.7 6.6% 12.4%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Total customer
base million 118.2 110.6 6.9% 118.2 110.6 6.9%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Data customer
base million 40.6 35.4 14.5% 40.6 35.4 14.5%
----------------- ------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
Mobile money
customer
base million 21.7 18.3 18.5% 21.7 18.3 18.5%
----------------- -------- -------- ---------- ---------- ------- ------- ---------- ----------
(1) Underlying revenue includes intra-segment eliminations of
$100m for the year ended 31 March 2021 and $91m for the prior
period. And it excludes one-time exceptional revenue of $20m
relating to a settlement in Niger in year ended 31 March 2021.
(2) Mobile money revenue post intra-segment eliminations with
mobile services was $301m for the year ended 31 March 2021 and
$220m for the prior period.
(3) Underlying EBITDA includes other income of $11m for the year
ended 31 March 2021 and $17m for the prior period.
(4) Depreciation and amortisation increase of $76m is mainly due
to investment in capex and additional spectrum in Nigeria.
(5) Operating exceptional items in the year ended 31 March 2021
includes exceptional revenue on account of a one-time settlement in
Niger amounting to $20m.
(6) Operating profit includes $6m CSR (Corporate Social
Responsibility) expense in the year ended 31 March 2021 and $5m in
the prior period.
(7) Tax charges increased more than the PBT growth mainly due to
a forex loss in non-DTA operating & HoldCo entities of $42m in
the year ended 31 March 2021 as compared to a gain of $21m in the
previous year.
(8) Profit after tax for the year ended 31 March 2021 was
largely flat compared with the previous year due to: (i) higher
exceptional benefits of $51m in the prior year (excluding tax
exceptional item); (ii) other finance costs in the prior year
included a derivative gain of $47m; and (iii) higher tax in the
year ended 31 March 2021 due to increased profits.
(9) In July 2019, following the announcement of the Initial
Public Offering (IPO), the company issued 676,406,927 new shares.
EPS has been restated to reflect the position if all the shares as
of 31 March 2021 been issued on 1 April 2019, for a like-for-like
comparison.
Financial review for the year ended 31 March 2021
These results continue to demonstrate the effective execution of
our strategy, delivering strong revenue growth and the significant
expansion of our underlying EBITDA margin. As a result, we were
able to deliver double-digit underlying revenue growth of 17.6% in
mobile services in constant currency (11.9% in reported currency)
and 35.5% revenue growth in mobile money services (29.1% in
reported currency).
Basic EPS was 9.0 cents, lower than the 10.3 cents from the
prior year, largely a result of the lower number of average shares
in the previous period (EPS impact of 0.5 cents), an increase in
tax charges due to higher operating profits and withholding tax on
dividends by subsidiaries, a one-off derivative gain in the prior
year amounting to $47m in other finance costs, and recognition of a
one-off gain of $72m related to the expired indemnity to certain
pre-IPO investors which was accounted for as an exceptional item.
Non-controlling interest more than doubled largely due to improved
profits in several operating companies ("OpCos") with minority
shareholdings, including Airtel Tanzania, Airtel Niger and Airtel
Malawi. Excluding exceptional items and the one-off $47m derivative
gain, basic restated EPS increased by 44.5%.
GAAP measures
Revenue
Reported revenue grew by 14.2%, driven by 19.4% growth in
underlying constant currency revenue, partially offset by currency
devaluations, mainly in the Nigerian naira (10%), Zambian kwacha
(34%) and Kenyan shilling (5.7%), in turn partially offset by
appreciation in the Central African franc (7.1%). Reported revenue
benefitted from a one-time exceptional revenue of $20m relating to
a settlement in Niger.
Operating profit
Operating profit was $1,119m, up 24.2% in reported currency,
largely a function of strong revenue growth and lower operating
expenditures in proportion to revenue. In constant currency
operating profit grew by 32.8%.
Net finance costs
Net finance costs were $423m, an increase of $51m, driven by
higher other finance costs which more than offset the reduced
interest costs of $8m from lower average gross debt. The increase
in other finance costs was due to a one-off derivative gain of $47m
in the previous year.
Taxation
Total tax charges increased $92m, to $282m. The increase in tax
charges was due to higher operating profits and withholding tax on
dividends by subsidiaries. The prior year also benefited from the
recognition of higher deferred tax credit of $51m in DRC compared
with only $36m in Tanzania during the current year.
Profit after tax
Profit after tax, at $415m, increased by 1.8%. This was largely
flat compared with the previous year a result of the prior period
recognition of a one-off gain of $72m related to the expired
indemnity to certain pre-IPO investors and a higher deferred tax
credit of $15m and one-off derivative gain of $47m in the prior
year, as well as higher tax in the current year. Excluding the
prior year benefits from exceptional items and the one-off
derivative gain, profit after tax increased 47%.
Basic EPS
Basic EPS was 9.0 cents, reduced from 10.3 cents in the prior
year, due to the lower number of average shares in the previous
period (EPS impact of 0.5 cents), several one-off gains in the
prior year: i) derivative gain of $47m in other finance costs; ii)
higher exceptional item benefits of $51m mainly from the
recognition of a one-off gain of $72m related to the expired
indemnity to certain pre-IPO investors; iii) an increase in tax
charges due to higher operating profit and withholding tax on
dividends by subsidiaries; and iv) higher non-controlling interests
due to higher profit contributions in OpCos with minority
shareholdings. Excluding exceptional items and the one-off $47m
derivative gain, basic EPS increased 44.5%. The $38m increase in
non-controlling interest (up 100.8%), mainly reflects higher profit
contributions from OpCos with minority shareholdings, including
Airtel Tanzania, Airtel Niger and Airtel Malawi.
Alternative performance measures [1]
Underlying revenue
Underlying revenue growth of 19.4% in constant currency was
primarily driven by the combination of 6.9% customer base growth to
118.2 million, and 7.7% ARPU growth. Underlying revenue growth was
recorded across all our regions; Nigeria growing by 21.9%, East
Africa by 23.5% and Francophone Africa by 10%. Double-digit revenue
growth was also achieved across all our service segments, with
voice growing 11.0%, data 31.2% and mobile money 35.5%, all in
constant currency.
Reported currency revenue growth further accelerated to 15.4% in
Q4'21, with constant currency revenue growth of 21.7%.
Underlying EBITDA
Underlying EBITDA, at $1,792m, increased 18.3% in reported
currency while in constant currency underlying EBITDA grew by
25.2%. The growth in underlying EBITDA was driven by underlying
revenue growth of 19.4% and improved efficiency in operating
expenses. Underlying EBITDA margin was 46.1%, an improvement of 181
basis points in reported currency and 210 basis points in constant
currency.
Foreign exchange had an adverse impact of $171m on revenue and
$86m on underlying EBITDA, reflecting currency devaluations, mainly
the Nigerian naira, Zambian kwacha and Kenya shilling, partially
offset by appreciation in the Central African franc.
Underlying EBITDA margin in Q4'21 was 47.7%, an improvement of
354 basis points in reported currency and 389 basis points in
constant currency.
Tax
The effective tax rate was 43.2% compared to 48.6% in the prior
year, largely a result of profit mix changes amongst the OpCos. The
effective tax rate is higher than the weighted average statutory
corporate tax rate of approximately 33%, largely due to the profit
mix between various OpCos and higher withholding tax on dividends
by subsidiaries.
The adjusted effective tax rate was 38.2% compared to 38.7% in
the previous period.
Exceptional items
An exceptional gain of $50m in the year ended 31 March 2021
consists of (i) a one-time benefit of $20m which represents
recognition of revenues pertaining to earlier years on a cumulative
catch-up basis, arising out of a settlement agreement entered with
a customer in one of the Group's subsidiaries (referred to as the
Niger telecom settlement) (ii) a deferred tax credit of $36m in
Tanzania, partially offset by (iii) one-off costs of $6m in one of
the Group's subsidiary in Francophone Africa. Exceptional items for
the year ended 31 March 2020 mainly consisted of a $72m gain
related to the expired indemnity to certain pre-IPO investors and a
deferred tax credit of $51m in DRC.
Free cash flow
Free cash flow was $647m, 42.8% higher than last year due to the
combination of an increase in underlying EBITDA and slightly lower
capex (due to logistical challenges during the Covid-19 pandemic).
This benefit was partially offset by an $81m increase in income tax
paid resulting from higher operating profits.
EPS before exceptional items
Restated EPS before exceptional items was 8.2 cents, an increase
of 18.2% on last year, with higher profits more than offsetting the
increase in other finance costs due to the recognition of a $47m
derivative gain in the prior period, higher non-controlling
interest due to higher profit in OpCos with minority shareholdings,
and an increase in tax charges due to the higher operating profit
and withholding tax on the dividends by subsidiaries. Excluding the
one-time derivative gain of $47m, restated EPS grew by 44.5%. The
increase in non-controlling interest by $38m (100.8%) is due to
higher profits in several OpCos with minority shareholdings,
including Airtel Tanzania, Airtel Niger and Airtel Malawi.
Leverage
Leverage (net debt to underlying EBITDA) improved to 2.0x (from
2.1x at 31 March 2020) despite investing $247m of intangible capex
to renew licences in two of our largest markets, Nigeria and
Uganda, and acquiring additional spectrum across a few of our
markets. The increase in underlying EBITDA more than offset the
increase in net debt.
Covid-19
The Covid-19 pandemic has contributed to a rapid acceleration of
already existing macro trends across the countries where we
operate, with people, businesses and governments seeking access to
more and better connectivity and improved financial inclusion.
These challenging times have shown that the telecoms industry is
a key and essential service for these economies, allowing customers
to work remotely, reduce their travel, keep connected and have
access to affordable entertainment and financial services.
Covid-19 presented significant challenges to the business,
particularly during the initial phase of the pandemic when mobile
money and services growth slowed. However, the actions taken by the
board in Q1 enabled the continued execution of our strategy,
including meeting increased customer demand for data, mobile money
and mobile services. We say a huge thank you to all our people, who
even during lockdowns and in times of national crisis managed to
keep our distribution channels available and our networks fully
operational despite increased demand. We also pay tribute to our
business partners who continued to deliver their services despite
numerous logistical challenges, and to the governments and
regulators who continued to support the industry and helped
facilitate our continued support to the economies of these
countries and the communities we serve.
At the beginning of the pandemic, which coincided with the start
of our financial year, most governments in the countries where we
operate acted swiftly to implement and enforce restrictions on the
movement of people to prevent contagion. These swift actions, along
with low population density, less frequent travel, and local
experience in dealing with contagious diseases, resulted in lower
infection rates in sub-Saharan Africa relative to some other
regions. The Covid pandemic eased during the course of the year,
and with that came some easing of restrictions and improvement of
local economies, although many consumers still feel cautious about
social and working habits. More recently we have seen a surge in
cases. Thus far, this has had no adverse impact on the business,
though we will continue to monitor the situation closely.
Around the world the vaccination effort has started, with many
governments hinting at a possible significant easing of social
distancing rules and travel restrictions this year, though it looks
like Africa may lag other economies in attaining full vaccination
cover. Despite the resilience demonstrated by our business during
the year, we are constantly monitoring how the situation is
evolving to identify key risks and put in place adequate mitigation
plans to minimise any potential disruptions.
The Group will continue to focus on ensuring the safety of our
employees, our outsourced partners and our customers; ensuring that
our network and distribution channels remain fully operational and
available; ensuring that our customers continue to have access to
financial services and ensuring that at Group level we are in the
right financial position to meet our financial obligations at all
times.
SAFETY: The Covid-19 crisis has led to profound changes in
operating environments across our markets and throughout the last
year, as a key priority, we continued to reinforce health and
safety measures for all our employees, for outsourced partners and
for our customers. All our offices continue to offer the option of
remote working, or working in shifts and with social distancing
practices, depending upon the critical needs of individual
functions. Our OpCos still have a large percentage of employees
working from home with increased digital access to enable a
seamless workflow. All employees continue to be on full pay and,
along with their family members, continue to receive full medical
insurance cover which includes any diagnostic testing, associated
physician visits and vaccination cost related to Covid-19. We have
also granted immediate paid medical leave for any employees
diagnosed with Covid-19. More recently we launched an employee
assistance programme which allows our employees access to free
consultations with mental healthcare professionals. The aim of this
programme is to help employees achieve mental well-being by
ensuring harmony between work and personal life and by providing
access to support when employees need to speak to someone.
The outsourced staff in our call centres have all been given the
option and equipment to either work from home with strict data
security protocols, or if necessary, from the office following
strict social distancing practices and regulatory guidelines.
Protective equipment and hand sanitisers have also been made
available within our shops to keep both our staff and customers
safe.
The safety of our customers is paramount to us. We have
delivered a range of educational digital campaigns explaining best
practices during the Covid-19 outbreak, and the importance of being
safe. We have significantly enhanced our self-care mobile app by
adding features to enable customers to self-service, removing the
need for a visit to a shop or an agent. We have also made a number
of educational websites accessible free of charge to give students
continuous access to quality education. Our staff across all our
OpCos have also generously contributed and sacrificed from their
salaries a total of $362k, which we have matched like-for-like as a
company and donated to the respective governments to support the
communities where we operate.
NETWORK: for many of our customers our network remains the main
source for their social interactions, their work and entertainment.
The key business continuity plans we implemented at the start of
the pandemic ensured that both active and passive maintenance
services could be safely carried out even when the movement of
people was restricted. During an increase in data traffic of more
than 74%, and voice traffic of more than 29% our network did not
experience any significant disruption.
DISTRIBUTION: ensuring customers retain access to our services
remains a key priority for us. When lockdown restrictions were
implemented, we increased stock levels of SIM cards and recharge
vouchers to ensure continued availability in our shops and enable
customers to buy recharges whenever convenient. We have also
encouraged customers to use digital methods of recharge, including
through Unstructured Supplementary Service Data (USSD), bank
portals or our app. In April 2020 we launched the new MyAirtel
self-care app in all 14 countries. Using the app, a customer can
check airtime or bundles and purchase them using Airtel Money or
any credit or debit cards. It also has various Airtel Money
features so that customers can send money to Airtel and other
operators, pay bills, pay merchants, scan and pay using Airtel's or
Mastercard's QR codes and virtual cards, and use Airtel Money and
e-recharge to minimise the impact of any possible disruption to our
distribution network. We have pushed the e-recharge scheme even
further by allowing customers to e-recharge both friends' and loved
ones' accounts, for which they also receive benefits in return. As
lockdown restrictions have eased, we have been able to expand our
distribution, in line with our strategy, and we continued to carry
higher stock levels to mitigate the risks that possible future
restrictions on the movement of people could have on our stock
levels and the ability of customers to access our recharge
vouchers.
MOBILE MONEY: during the initial phase of the pandemic, mobile
money revenue growth slowed to 26.3% as the business was impacted
by social distancing measures and non-essential service closures,
reducing customers' ability to deposit and withdraw cash.
Additionally, several governments asked mobile money operators to
waive fees on certain transactions, including person-to-person and
merchant payments. Afterwards, as lockdown restrictions were
generally eased and nearly all fees on transactions reinstated,
revenue growth for the full year rebounded to 35.5%, reaching 38.7%
in Q4, with mobile money contributing over 10.6% of Group revenue
in the quarter.
LIQUIDITY and CAPEX: our financial position continued to improve
during the year. Free cash flow increased 42.8% during the
financial year and underlying EBITDA margin continued to improve by
210 basis points to 46.1%. Our net debt to underlying EBITDA ratio
improved to 2.0x, despite investing $247m of intangible capex to
renew licences in two of our largest markets, Nigeria and Uganda,
and acquiring additional spectrum across several markets. Our cash
balances, in conjunction with more than $1.1bn of committed undrawn
facilities, ensure we can continue to meet our financial
obligations. We have $2.4bn in long-term bonds with the first
repayment of $879m (EUR750m) due in May 2021 which will be paid
through a mix of cash held as well as from the proceeds of a $500m
inaugural multi-bank long-term facility (part of the $1.1bn undrawn
facilities mentioned above) entered into by Airtel Africa plc in
April 2021. Post this repayment, only $1.5bn of long-term bonds
will remain outstanding for the Group, with the next major bond
repayment of $505m not due until March 2023. In recent months we
have announced several transactions including asset monetisation
through tower sales and strategic initiatives to unlock value in
our mobile money business, amounting to c$400m of expected proceeds
to be received which will further improve our financial position
and continue our deleveraging. Additionally, we have agreed longer
payment terms of up to around 12 months with strategic vendors in
certain markets to facilitate continued investment in modernising
the network, while also increasing liquidity.
We have continued to invest in our network with tangible capex
spend for the year of $614m. This was slightly below our committed
spend of between $650m to $700m due largely to the impact of import
logistics and on-field deployment challenges during the pandemic.
Our capex guidance for the next financial year remains in the range
of $650m to $700m as we continue to invest in our network and
distribution.
We have identified several ways to retain cash, reduce costs and
mitigate risks from Covid-19. In addition, we have continued to
invest in revenue driving expenditures, while reducing
discretionary spend.
See pages 27 for our going concern assessment.
FOREIGN EXCHANGE: The global economic slowdown combined with
lower oil and commodity prices has resulted in currencies devaluing
across our markets, including the Nigerian naira, Kenyan shilling
and Zambian kwacha. By far our largest exposure is in Nigeria,
which represents 40% of our revenue and 47% of underlying EBITDA.
On a 12-month basis, we estimate that a 1% Nigerian naira
devaluation will have a negative $14m impact on revenue, $8m on
underlying EBITDA and $6m on finance costs.
Other significant updates
Post year end announcement of appointment of new CEO, and other
senior executive changes
On 29 April 2021, Airtel Africa announced that Olusegun "Segun"
Ogunsanya, managing director and chief executive officer Airtel
Nigeria is to succeed Raghunath "Raghu" Mandava, as managing
director and chief executive officer following Raghu Mandava's
informing the Board of his intention to retire. Segun Ogunsanya
will join the Board of Airtel Africa plc with effect from 1 October
2021.
Segun Ogunsanya joined Airtel Africa in 2012 as managing
director and chief executive officer Airtel Nigeria and has been
responsible for the overall management of our operations in
Nigeria, our largest market in Africa. Segun has more than 25
years' business management experience in banking, consumer goods
and telecoms. Before joining Airtel in 2012, Segun held leadership
roles at Coca-Cola in Ghana, Nigeria, and Kenya (as managing
director and chief executive officer). He has also been the
managing director of Nigerian Bottling Company Ltd (Coca-Cola
Hellenic owned) and Group head of retail banking operations at
Ecobank Transnational Inc, covering 28 countries in Africa. He is
an electronics engineer and also a chartered accountant.
Raghu Mandava will be retiring as managing director and chief
executive officer, as a director of Airtel Africa plc and as a
member of the Market Disclosure Committee on 30 September 2021.
Arrangements have been made to ensure a smooth transition of
responsibilities. Following his cessation of employment at Airtel
Africa, Mr. Mandava will be available to advise the Chairman, the
Airtel Africa Board and the newly appointed managing director and
chief executive officer for a 9-month period.
Jaideep Paul, chief financial officer, has been appointed as an
executive director and will join the Board of Airtel Africa plc
with effect from 1 June 2021.
Strategic investments in our mobile money business by The Rise
Fund and Mastercard
In March, Airtel Africa signed agreements with both TPG's The
Rise Fund and Mastercard who will invest $200m and $100m
respectively into Airtel Mobile Commerce BV ("AMC BV"), a wholly
owned subsidiary of Airtel Africa plc. AMC BV is the holding
company for several of Airtel Africa's mobile money operations; and
is intended to own and operate the mobile money businesses across
all of Airtel Africa's 14 operating countries.
These transactions value Airtel Africa's mobile money business
at $2.65 billion on a cash and debt free basis. The Rise Fund and
Mastercard will each hold a minority stake in AMC BV upon
completion of the transactions, with Airtel Africa continuing to
hold the remaining majority stake. The transactions are subject to
customary closing conditions including necessary regulatory filings
and approvals, as necessary, and the inclusion of specified mobile
money business assets and contracts into AMC BV.
Alongside the investment, the Group and Mastercard also signed a
new commercial framework agreement and detailed commercial
arrangements which will deepen our commercial partnerships across
numerous areas including card issuance, payment gateway, payment
processing, merchant acceptance and remittance solutions, amongst
others.
It is the aim of Airtel Africa to explore the potential listing
of the mobile money business within four years. The Group is open
to the possibility of further minority investments into Airtel
Money, up to a total of 25% of the issued share capital of AMC BV.
There can be no certainty that further transactions will be
concluded, or as to the final terms of any transactions.
The proceeds from The Rise Fund and Mastercard's investments in
AMC BV will be used to reduce Group debt and invest in network and
sales infrastructure in the respective operating countries.
Agreements for tower sales in Madagascar and Malawi and
potential tower sales in Chad and Gabon
In early March, the Group signed agreements to sell its
telecommunications tower companies in Madagascar and Malawi to
Helios Towers plc ("Helios Towers"), a leading independent
telecommunications infrastructure company in Africa. The Group's
tower portfolios in these two markets together comprise 1,229
towers which form part of the Group's wireless telecommunications
infrastructure network.
These transactions, comprising two separate agreements, one in
respect of each jurisdiction, are subject to customary closing
conditions including required regulatory approvals and are not
inter-conditional on each other. The transactions are expected to
close in or around calendar Q4 2021.
The aggregate gross consideration for the transactions is
expected to be approximately $108m. Under the terms of the
transactions, the Group's subsidiaries will continue to develop,
maintain and operate their equipment on the towers under separate
lease arrangements, largely made in local currencies, with Helios
Towers. In addition, as part of the transactions, the Group has
agreed to build to suit commitments with Helios Towers for an
additional 195 sites across Madagascar and Malawi over the three
years following completion, for which a further $11m of
consideration is payable.
In addition, Airtel Africa has also entered into exclusive
Memorandum of Understanding agreements for the potential sale of
its tower assets in Chad and Gabon with Helios Towers ("proposed
transactions"). These proposed transactions are subject to the
signing of definitive legal agreements for sale, including
customary closing conditions such as required regulatory approvals.
It is envisaged that the proposed transactions will also
incorporate lease arrangements with Helios Towers and build to suit
commitments in Chad and Gabon. The proposed transactions are not
inter-conditional and are expected to close before the end of our
fiscal year 2022.
The Group expects to disclose consideration details for the
proposed transactions upon signing of the acquisition agreements in
each market. The Group's tower portfolios in the two markets of the
proposed transactions together comprise c.1,000 towers which form
part of the Group's wireless telecommunications infrastructure
network.
These transactions and proposed transactions are the latest
strategic divestment of the Group's tower portfolio as it focusses
on an asset-light business model and on its core subscriber-facing
operations.
The proceeds from the transactions and proposed transactions
will be used to reduce Group external debt and to invest in network
and sales infrastructure in the respective operating countries.
Dividend
The Board has recommended a final dividend of 2.5 cents per
ordinary share. The proposed final dividend will be paid on 23 July
2021 to all ordinary shareholders who are on the register of
members at the close of business on 25 June 2021. We paid an
interim dividend of 1.5 cents per ordinary share in December
2020.
In October 2020 the Board approved a new progressive dividend
policy during the period due to the combination of continued strong
business performance, significant opportunities to invest in future
growth and the aim to continue to reduce leverage. The newly
adopted dividend policy aims to grow the dividend annually by a mid
to high single digit percentage from a base of 4 cents per share
for FY 2021, until reported leverage (calculated as net debt to
underlying EBITDA) falls below 2.0x. At the point when reported
leverage (calculated as net debt to underlying EBITDA) is below
2.0x, the Board will reassess the dividend policy in the light of
the prevailing growth outlook for the Group.
New SIM registration rules in Nigeria
Following a directive issued by the Nigerian Communications
Commission (NCC) on 15 December 2020 to all Nigerian telecom
operators, Airtel Nigeria has been working with the government to
ensure that all our subscribers provide their valid National
Identification Numbers (NINs) to update SIM registration
records.
Initially, new customer acquisitions were barred until
significant progress had been made on linking the active customer
base with verified NINs. Natural churn in the customer base led to
a loss of 2.5 million active mobile customers in the final quarter
of the year, however the financial impact has been minimal, with
continued revenue growth in Nigeria, due largely to the
significantly lower ARPU of the churned base and increased usage by
the active base. In April, the NCC announced that it would allow
new customer enrolment to recommence from certified outlets. Airtel
Nigeria has so far received interim approvals for c800 outlets and
new customer registrations have recommenced in those outlets
accordingly.
The directive set an initial deadline for customers to register
their NIN with their SIM of 30 December 2020. This was subsequently
moved several times with the latest deadline set for 30 June
2021.
We have made significant progress on capturing existing NINs and
building the database in collaboration with National Identity
Management Commission (NIMC). To date, out of Airtel Nigeria's 42.0
million active customers, we have collated NIN information for 23.2
million active mobile customers. To complete the registration
process, we must also verify the NIN information we have received
from our subscribers with the NIMC.
For the still significant proportion of the population, and our
customers, that do not have a NIN we have opened enrolment centres
in collaboration with the NIMC and we are in the process of rolling
out thousands of devices to further NIN enrolment. We continue to
work closely with the government to ensure full compliance.
Post year end refinancing
In April 2021, Airtel Africa agreed a new $500m loan facility
with a group of relationship banks.
The new committed facility consists of a combination of a
revolving credit facility and term loans with tenor of up to 4
years. The facility will be used to partially refinance the Group's
EUR750m euro denominated bond ($879m) due 20 May 2021. The balance
of the euro denominated bond will be repaid with existing Group
cash to reduce gross debt and associated interest costs.
The new loan facility further strengthens the core liquidity of
the Group. It also has prepayment flexibilities that will allow the
Group to optimise the efficiency of its capital structure with the
free cash flows and cash receipts anticipated over the next 12
months following the recent announcements related to tower sales
and mobile money minority investments.
This new loan facility establishes a standalone credit score for
the Group, requiring no parent guarantees from Bharti Airtel.
Licence renewal in Nigeria
In January 2021, Airtel Networks Limited ("Airtel Nigeria"),
announced that its application for renewal of the spectrum licences
in the 900MHz and 1800MHz bands had been approved by the Nigerian
Communications Commission ("NCC"). Pursuant to Section 43 of the
Nigerian Communications Act, 2003 and Condition 20 of the Unified
Access Service Licence (UASL), Airtel Nigeria applied to renew the
UASL (operations licence) and spectrum licences in the 900MHz and
1800MHz bands which would otherwise expire on 30 November 2021.
Following the application, the NCC offered Airtel Nigeria the
opportunity to renew its spectrum licences in the 900MHz and
1800MHz bands for a period of ten years, with effect from 1
December 2021 until 30 November 2031, which Airtel Nigeria
accepted. Under the terms of the spectrum licences Airtel Nigeria
paid 71.61 billion naira ($182 million) in respect of the licence
renewal fees.
The UASL is still under consideration by the NCC and formal
confirmation of renewal is expected before the expiry date of 30
November 2021.
New licence in Uganda
In December, Airtel Uganda Limited (Airtel Uganda) was issued
with a National Telecom Operator (NTO) Licence following a period
of negotiation and transition to a new licensing regime.
The new licence is with effect from 1 July 2020 and is for a
period of 20 years, until 30 June 2040. Airtel Uganda will retain
all its current spectrum subject to the law and terms of
assignment. The scope of services is the provision of basic
telecommunication services, infrastructure services, and
value-added telecommunication services. In addition, Airtel Uganda
commits to achieving coverage of 90% of the geographical boundary
of Uganda within five years of the effective date of the licence,
with a minimum obligation of providing voice and data services.
Under the terms of the licence Airtel Uganda has paid $74.6m for
the first ten years of the licence, which includes VAT of $11.4m.
After the first 10 years, Airtel will be invoiced for the licence
fee for the remaining 10 years.
Under Article 16 of the NTO, Airtel Uganda is obliged to comply
with the sector policy, regulations and guidelines requiring the
listing of part of its shares on the Uganda Stock Exchange. The
current Uganda Communications (Fees & Fines) (Amendment)
Regulations 2020, create a public listing obligation for all NTO
licensees, and specifies that 20% be listed within 2 years of the
date of the effective date of the licence.
New shareholding requirements in Kenya
On 9 April 2021, the Minister for ICT published an amendment to
the National Information Communications and Technology (ICT) Policy
Guidelines, 2020 (ICT Policy). The ICT Policy amendment will affect
Airtel Africa's Kenya business as follows:
-- Airtel Networks Kenya Limited, which currently holds an
indefinite exemption from the Minister for ICT, dated 20 March
2013, has 3 years with effect from 9 April 2021 to comply with the
requirement to have a 30% local shareholding.
-- Airtel Money Kenya Limited, which holds a Content Service
Provider Licence from the Communications Authority of Kenya, with
effect from November 2020, has 3 years from the date of the licence
to comply with the requirement to have a 30% local
shareholding.
Under the amended ICT policy, a licensee may apply to the ICT
Minister for an extension of time to comply with the requirement,
or to obtain an exemption.
New sustainability framework
Our new sustainability framework features in this year's Annual
Report. It articulates at the highest level the four pillars of our
environmental, social and governance (ESG) strategy, outlining for
each of "our business", "our people", "our community" and "our
environment" pillars, both the role that we can play, and the focus
areas where we can make the biggest difference.
Aligned with our sustainability framework, we have identified
the six UN Sustainability Development Goals (SDGs) where we believe
we can have the biggest impact. These are delivering Quality
Education (SDG 4); Gender Equality (SDG 5); Decent Work and
Economic Growth (SDG 8); Industry Innovation & Infrastructure
(SDG 9); Reduced Inequalities (SDG 10) and Responsible Consumption
& Production (SDG 12).
We have also defined our ESG materiality matrix through in-depth
analysis of industry benchmarks and best practice, ESG ratings and
reporting frameworks.
We are currently in the process of engaging with representatives
of all our stakeholder groups to review our approach and
findings.
The full details of our sustainability framework, materiality
matrix, and the genuine, meaningful and measurable contribution we
can make to our six key SDGs are laid out in this years' Annual
Report.
In Q3'22, we will be publishing the measurable medium to
long-term goals we set ourselves. Work is underway to identify the
programmes and investments needed, along with roll-out plans and
key milestones on our journey towards these goals.
We are also committing to report annually on our progress, and
in 2022, we will be publishing our first Sustainability Report,
which will be prepared in compliance with Global Reporting
Initiative and Task Force on Climate-Related Financial Disclosures
frameworks.
At Airtel Africa, transforming lives is more than just our
purpose, it is our DNA. The sustainability framework we have
established, and the detailed plans we will be publishing in
October will build upon the strong foundation of work we are
already undertaking of an environmental, social and governance
nature, not just at Group level, but in each of our local
operations.
Directorate change
On 27 October 2020, we announced the appointment of Kelly Bayer
Rosmarin as a non-executive director with immediate effect.
Ms. Bayer Rosmarin's appointment was by nomination of the
controlling shareholder pursuant to the terms of the relationship
agreement dated 17 June 2019 between the Company, Bharti Airtel,
Airtel Africa Mauritius Limited, the majority shareholder and an
indirect subsidiary of Bharti Airtel, and Bharti Telecom. Ms. Bayer
Rosmarin replaced Arthur Lang who stepped down as a non-executive
director on the same date.
Ms. Bayer Rosmarin is currently CEO of Singtel Optus and
Consumer Australia. She was previously with Commonwealth Bank of
Australia, where she held several senior positions and varied
portfolios, before being appointed as Group Executive of
Institutional Banking and Markets. Ms Bayer Rosmarin is recognised
for leveraging technology, data and analytics to develop leading
customer services and experience. She was named in the Top 10
Businesswomen in Australia and the Top 25 Women in Asia Pacific
Finance and holds a variety of board and advisory
responsibilities.
Ms. Bayer Rosmarin has, since February 2019, served as an
independent non-executive director on the board of OpenPay, listed
on the Australian Securities Exchange, and will continue in that
role. Openpay is a payments technology company based in
Australia.
Additional spectrum
In June 2020, Airtel Malawi plc was allocated 10 MHz of spectrum
in the 2600 band. In October, additional spectrum of 10 MHz in the
2600 band and 5 MHz in the 1800 band was allocated to Airtel
Uganda. In December, Airtel Chad received 5 MHz of spectrum in the
900 band and Airtel Zambia received 10 MHz in the 800 band.
Abandonment of merger of Airtel Networks Kenya Limited with
Telkom Kenya Limited
In August 2020, Airtel Africa plc announced that its subsidiary
Airtel Networks Kenya Limited ("Airtel Kenya") and Telkom Kenya
Limited ("Telkom") had decided to no longer pursue completion of an
M&A transaction. The transaction was announced in February 2019
and was subject to the satisfaction of various conditions
precedent, including regulatory approvals. Despite Airtel Africa
plc and Telkom's respective endeavours to reach a successful
closure, the transaction had gone through a very lengthy process
which led the parties to reconsider their stance.
Partnership with UNICEF
In May 2020, Airtel Africa announced a partnership with UNICEF
aimed at providing children with access to remote learning and
enabling access to cash assistance for their families via mobile
cash transfers. Under this partnership, UNICEF and Airtel Africa
will use mobile technology to benefit an estimated 133 million
school age children currently affected by school closures in 13
countries across sub-Saharan Africa during the Covid-19
pandemic.
Mobile money
(a) Partnership with remittance leading institutions
Airtel Africa has entered into several strategic partnerships
with MoneyGram, Mukuru and WorldRemit. Through these partnerships,
more than 21 million Airtel Money customers in 12 countries can
transfer and receive funds across the globe directly from and into
their mobile money wallets on their phone. Mobile money service
alliances with these leading international money transfer or
remittance service providers will extensively enhance customer
access to the digital world.
(b) Partnership with Standard Chartered Bank
In August 2020, Airtel Africa announced a strategic partnership
with Standard Chartered Bank, a leading international banking
group, to drive financial inclusion across key markets in Africa by
providing customers with increased access to mobile financial
services. Standard Chartered and Airtel Africa work together to
co-create new, innovative products aimed at enhancing the
accessibility of financial services and ultimately, better serve
people across Africa. In line with this, Airtel Money's customers
will be able to make real-time online deposits and withdrawals from
Standard Chartered bank accounts, receive international money
transfers directly to their wallets, and access savings products
amongst other services.
(c) Partnerships with Mastercard, Samsung and Asante
In September 2020, Airtel Africa announced an expansion of its
partnership with Mastercard by launching a Pay-on-Demand payments
platform to drive the digital economy across Africa. This
Pay-on-Demand platform enables safe, secure, and convenient
consumer financing, provided by Asante, on Samsung devices with an
embedded Knox security platform, through Airtel Africa's mobile
network. The partnership facilitates usage-based payments and
builds creditworthiness.
These partnerships align with the Group's strategy of expanding
the range and depth of Airtel Money offerings to drive customer
growth and penetration.
Information on additional KPIs
An investor relations pack with information on the additional
KPIs and balance sheet is available to download on our website at
airtel.africa/investors .
Strategic overview
The Group provides telecoms and mobile money services in 14
emerging markets of sub-Saharan Africa. Our markets are
characterised by huge geographies with relatively sparse
populations, high population growth rates, high proportions of
youth in the population, low smartphone penetration, low data
penetration and relatively unbanked populations. Unique mobile user
penetration across the Group's footprint was only 46%, and banking
penetration was under 50%. These indicators illustrate the
significant opportunity still available to Airtel Africa to enhance
both digital and financial inclusion in the communities we serve,
enriching their lives at the same time as growing our revenues,
profitably, across each of our key services of voice, data and
mobile money.
The Group continued to invest in its network and distribution
infrastructure to enhance both mobile and connectivity and
financial inclusion across our countries of operation. In
particular, we continued to invest in expanding our 4G network
footprint to increase data capacity in our networks to support
future business growth, as well as deploying new sites, especially
in rural areas, to enhance coverage and connectivity.
Our 'Win with' strategy describes the six strategic pillars
through which we actively work to achieve this. Cutting across
these pillars are our commitment to transforming lives, driving
sustainable development and acting as a responsible business. We
continued to make good progress across each of our core strategic
pillars: Win with network, Win with customers, Win with data, Win
with mobile money, Win with cost and Win with people.
Win with network
The Group's strategy is to invest in our network by expanding 4G
coverage and building capacity to cater for the future needs of our
customers and to continue providing them with high-speed data. The
expansion of the 4G network across our footprint and connecting
rural areas through deployment of new sites continued to be our key
focus areas. Our investment in the 4G network through single RAN
technology has resulted in both expansion of our 4G coverage and
enhanced network's capacity. 76.5% of our total sites are now on
4G, compared to 64.7% in the previous period. We aim to build a
leading, modernised network that can provide the data capacity to
meet rapidly growing demand, and enhanced connectivity and
digitalisation needs of our markets. Our network data capacity
increased by 59.4% in the year, reaching 12,000+ TB per day, with
additional capacity being added at only very marginal cost. We
continued to modernise our network across all our countries of
operation, with 89% of our sites on Single RAN.
The Group added over 11,500km of additional fibre, with total
fibre now over 54,500km. Furthermore, we have increased the total
number of sites connected to fibre (increased by 15.6%) enhancing
our network uptime metrics and delivering high-speed data to more
of our customers.
The Group also added additional spectrum in a few of our
markets. We have added 10 MHz in the 2600 band in Malawi, 10 MHz in
the 2600 band and 5 MHz in the 1800 band in Uganda, 5 MHz in the
900 band in Chad and 10 MHz in the 800 band in Zambia. These
allocations will help us to maximise network capacity and
coverage.
Capital expenditure related to investment activities during the
period was $614m, excluding spectrum acquisitions and licence
renewal.
Win with customers
Sub-Saharan Africa is characterised by low penetrated markets,
with unique subscriber penetration at 46%. The Group continued to
build a unique mix of multi-brand and exclusive franchise channels,
combined with a simplified and enhanced self-service app to provide
a seamless customer onboarding experience. These have enabled us to
add customers, resulting in customer base growth of 6.9% for the
year. This has also helped us to grow voice revenue by 11.0% in
constant currency.
The Group continued its investment in strengthening our
distribution network infrastructure, with a focus on rural
distribution networks. During the period, the Group expanded its
exclusive franchise stores, adding more than 15,400 kiosks and
mini-shops as exclusive franchise stores across our footprint.
We are driving loyalty and consumption through our smart product
approach and tailored pricing. We provide simple, transparent
offerings, 'more for more' bundles offering lower unit prices with
longer validity and segmented offers based on balance, usage and
type of devices.
The launch of our digital onboarding app has helped us to
enhance customer experience; allowing customers to use our services
within just a few minutes of the sale of a SIM card. The digital
app captures all regulatory requirements, delivering a mostly
paperless activation process. Further, the MyAirtel self-care app
and our interactive and dynamic IVR (interactive voice response)
have further improved customer experience by facilitating both
speedier query resolution and digital recharge capabilities.
The Group continues to focus on increasing the adoption of 'more
for more' bundles to enhance both usage and ARPU. The Group's smart
offerings and attractive pricing proposition led to 16.4% higher
usage per customer, contributing to a voice revenue increase of
11.0%.
Win with data
The Group continued to invest in the expansion of our 4G
network, adding significant data capacity to the network at only
marginal cost, expanding both home broadband and enterprise
business services to greater leverage the 4G network; growing data
ARPU and data revenue. We continue to focus on increasing
smartphone ownership and increasing data usage at scale, largely
via smartphone offerings through OEM (Original Equipment
Manufacturer) device partnerships, and through expanding our
network of smartphone device selling outlets.
Our improved 4G network contributed to an increase in smartphone
penetration, in data customers and in up-take of large data
volumes, resulting in greater data consumption per customer.
Smartphone penetration was up by 1 percentage points to 33% and our
data customer base grew by 14.5%, now representing 34.3% of our
total customer base.
Data usage per customer reached 2.6 GB per customer (from 1.8 GB
per customer) led by an increase in smartphone penetration and
expansion of our home broadband and enterprise customers. This
helped us grow data revenue 31.2% in constant currency. Growing
penetration and usage of 3G and 4G data customers helped us grow
data ARPU 8.2%. 4G data usage more than doubled in the year,
contributing 62.2% of total data usage on the network in Q4'21.
Win with mobile money
The Group has continued to drive financial inclusion across its
footprint. The low penetration of traditional banking services
across our footprint leaves a large footprint of unbanked customers
whose needs can be largely fulfilled through mobile money services.
We aim to drive the uptake of Airtel Money services in all our
markets, harnessing the ability of our profitable mobile money
business model to enhance financial inclusion in some of the most
'unbanked' populations in the world.
The Group continued to expand the exclusive distribution network
of kiosks, mini-shops and Airtel Money branches, so that customers
can access their cash with relative ease. We have increased the
number of mobile money agents by 30.7%, kiosks by 68.8% and mobile
money branches by 95%. Throughout the year, the expansion of our
mobile money product portfolio, both through partnerships with
leading financial institutions and through expansion of our
merchant ecosystem, have further strengthened our mobile money
propositions.
Our distribution expansion and enhanced offerings helped drive
18.5% growth in our mobile money customer base. Our mobile money
business now serves over 21.7 million customers, representing 18.3%
of our total customer base.
Mobile money continues to be one of our fastest growing service
segments, delivering revenue growth of 35.5% for the year. It is an
increasingly important part of our business, delivering $51bn of
annualised (Q4'21) transaction value and accounting for 10.6% of
total revenue in Q4'21.
Mobile money ARPU increased by 6.6% over the year, driven by
increased transaction values and higher contributions from merchant
payments, cash transactions, P2P transfers and mobile services
recharges through Airtel Money.
Win with cost
Our operating cost model is focused on enhancing cost efficiency
and digitalisation initiatives. We embrace robust cost discipline
and continuously seek to improve processes to deliver one of the
highest underlying EBITDA margins in the industry. We use the
latest technology to optimally design our network to improve the
efficiency of our capital expenditure; enabling us to build large
incremental capacities at lower marginal cost.
As we continued to expand our business, various cost efficiency
initiatives were undertaken during the year, relating mainly
to:
(i) energy and loading cost savings, as we benefit from single
RAN network modernisation; (ii) incremental sites at a lower
rate;
(iii) remodelling of managed services; and (iv) leased line
capacity optimisation and implementation of dynamic and contextual
IVR. In addition to these initiatives, we reduced travel and
facility expenses during the year due largely to Covid-related
restrictions on movements and working from home initiatives.
This has contributed to an expansion of our underlying EBITDA
margin by 181 basis points in reported currency and 210 basis
points in constant currency. Our underlying EBITDA margin was 46.1%
for the year, and operating expenditure as a percentage of revenue
improved by 2.0 percentage points.
Win with people
Our people continue to be at the centre of everything we do with
employees based in 17 countries and a workforce representing 34
nationalities. We share a passion for the way we do business and
the lives we transform. Together, we are growing and continue to
make a positive impact on the communities and nations we serve.
Our talented and diverse people have continued to demonstrate
incredible dedication, resilience and adaptability to deliver
business results, despite the challenges faced. More importantly,
we worked collaboratively to build and connect our teams.
Gender diversity and inclusion remain a key focus area and we
are continuously striving to make further progress on this.
We continue to invest in opportunities for learning and
development of our people across all our operations. This was
accelerated through the launch of several digital platforms.
Building strong functional expertise and capability is a key driver
of our performance.
Keeping our people connected and engaged was facilitated through
a series of town halls, upward feedback sessions, the annual
strategic and award conclave, employee engagement surveys and
one-on-ones with senior management.
The Group reward system is based on simple and consistent
metrics that drive a high-performance culture. We align our people
performance metrics to our business priorities.
Our benefits continue to be aligned with best market practices
and include fully paid medical insurance and an employee assistance
program which allows our people free consultation to wellbeing and
healthcare professionals.
We continue to make strides to be an employer of choice with a
diverse and inclusive work environment.
Financial review for the year, ended 31 March 2021
Nigeria
Description Unit Year ended Quarter ended
of
measure
-------------- ---------- -------------------------------------------- --------------------------------------------
March-21 March-20 Reported Constant March-21 March-20 Reported Constant
currency currency currency currency
change change change change
% % % %
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Summarised
statement
of operations
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Revenue $m 1,552 1,373 13.1% 21.9% 422 377 12.0% 22.9%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Voice
revenue
(1) $m 897 850 5.6% 13.9% 240 234 2.9% 12.9%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Data revenue $m 549 435 26.3% 36.2% 152 120 26.4% 38.8%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Other
revenue
(1) $m 106 88 20.2% 29.7% 30 23 29.0% 41.7%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Underlying
EBITDA $m 839 744 12.8% 21.6% 232 209 10.6% 21.5%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Underlying
EBITDA (15) (14) (68)
margin % 54.1% 54.2% bps bps 54.8% 55.5% bps (65) bps
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Depreciation
and
amortisation $m (236) (183) 28.9% 38.9% (60) (47) 26.8% 41.0%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Exceptional
item $m - 5 (100.0%) (100.0%) - - 0.0% 0.0%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Operating
profit
(2) $m 602 565 6.5% 14.9% 172 162 6.0% 15.9%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Capex $m 275 325 (15.3%) (15.3%) 97 145 (33.4%) (33.4%)
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Operating
free
cash flow $m 564 419 34.6% 53.6% 135 64 110.9% 170.6%
-------------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Operating
KPIs
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
ARPU $ 3.0 2.9 2.2% 10.2% 3.3 3.1 6.6% 17.0%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Total
customer
base million 42.0 41.8 0.5% 42.0 41.8 0.5%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Data customer
base million 17.7 16.7 5.6% 17.7 16.7 5.6%
-------------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
(1) Voice revenue and other revenue includes inter-segment
revenue of $1m and $2m respectively in the year ended 31 March
2021. Excluding inter-segment, voice revenue was $896m and other
revenue was $104m in the year ended 31 March 2021.
(2) The operating profit in above table includes a CSR
(Corporate social responsibility) expense of $0.7m in the year
ended 31 March 2021 and $1m in the year ended 31 March 2020.
Revenue grew by 13.1% in reported currency, with constant
currency growth of 21.9% offset by Nigerian naira devaluation of
10% (YoY). Reported currency revenue grew by 12.0% in Q4'21, and
22.9% in constant currency.
Voice revenue grew by 13.9% in the year. This was driven by
customer base growth of 0.5%, and voice ARPU growth of 2.9%,
supported by an increase in voice usage per customer, up 12.4%. The
customer base growth was supported by continued expansion of our
distribution network and network infrastructure, with a slowdown in
customer base growth in the second half of the year attributable to
new "Know-Your-Customer" (KYC) requirements in Nigeria. In Q4'21,
voice revenue grew by 12.9% in constant currency, mainly driven by
voice ARPU growth of 7.5%, largely due to increased voice usage per
customer.
Data revenue continues to be the key driver of Nigeria revenue
growth, with constant currency revenue growth of 36.2%. This was
driven by 5.6% growth in the number of data customers, and 15.3%
growth in data ARPU. The data customer base growth was supported by
expansion of our 4G network, with 84% of total sites now on 4G.
Data customer penetration increased to 42.1%, up
2 percentage points from the prior year. Data ARPU increased
15.3% from increased data usage per customer, which was up 47.4% in
the year from 1.9 GB per month to 2.8 GB per month. Q4'21 data
usage was 3.2 GB per customer. Data revenue accounted for 35.4% of
total revenue in the year, up 3.7 percentage points from 31.7% in
the prior year.
Other revenue grew by 29.7%, with the main contribution coming
from growth in VAS revenue, led by airtime credit services.
Underlying EBITDA grew by 12.8% to $839m in reported currency,
with a constant currency growth of 21.6%. At 54.1%, the underlying
EBITDA margin was broadly in line with the prior year. The slight
decline year on year in the Q4 underlying EBITDA margin to 54.8%
(from 55.5%) was due to increased operating expenses, largely from
the rollout of new sites (over 1,400 added in the year).
Capital expenditure was $275m, marginally lower than the prior
year, largely due to logistical challenges faced during the
pandemic. Operating free cash flow was $564m, up 53.6%, from the
combination of underlying EBITDA growth and capex reduction.
East Africa (1)
Description Unit Year ended Quarter ended
of
measure
-------------- ---------- -------------------------------------------- --------------------------------------------
March-21 March-20 Reported Constant March-21 March-20 Reported Constant
currency currency currency currency
change change change change
% % % %
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Summarised
statement
of operations
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Revenue (2) $m 1,381 1,201 15.0% 23.5% 358 310 15.4% 23.9%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Voice
revenue
(3) $m 650 606 7.4% 15.4% 164 153 7.6% 15.5%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Data revenue $m 354 307 15.4% 23.9% 92 82 12.2% 20.5%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Mobile money
revenue
(4) $m 291 213 36.1% 47.2% 79 58 36.4% 47.8%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Other
revenue
(3) $m 150 131 14.2% 20.8% 38 32 18.1% 24.7%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Underlying
EBITDA $m 631 485 30.0% 40.2% 168 125 34.4% 44.0%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Underlying
EBITDA 529 541 665 653
margin % 45.7% 40.4% bps bps 47.0% 40.3% bps bps
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Depreciation
and
amortisation $m (221) (229) (3.7%) 2.5% (57) (55) 2.3% 8.9%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Exceptional
item $m - 10 (100.0%) (100.0%) - - 0.0% 0.0%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Operating
profit
(5) $m 408 266 53.7% 67.8% 111 70 59.8% 72.3%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Capex $m 249 181 37.5% 37.5% 81 61 33.9% 33.9%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Operating
free
cash flow $m 382 304 25.6% 42.0% 87 64 34.8% 54.3%
-------------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Operating
KPIs
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
ARPU $ 2.3 2.2 2.5% 10.0% 2.3 2.2 5.2% 13.0%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Total
customer
base million 53.1 48.6 9.2% 53.1 48.6 9.2%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Data customer
base million 16.2 13.3 21.5% 16.2 13.3 21.5%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Mobile money
customer
base million 18.0 15.5 16.4% 18.0 15.5 16.4%
-------------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
(1) The East Africa business region includes Kenya, Malawi,
Rwanda, Tanzania, Uganda and Zambia.
(2) Revenue includes intra-segment eliminations of $64m for the
year ended 31 March 2021 and $56m for the year ended 31 March
2020.
(3) Voice revenue and other revenue includes inter-segment
revenue of $1m and $3m respectively in the year ended 31 March
2021. Excluding inter-segment, voice revenue was $649m and other
revenue was $147m in the year ended 31 March 2021.
(4) Mobile money revenue post intra-segment eliminations with
mobile services was $227m for the year ended 31 March 2021 and
$157m for the prior year.
(5) Operating profit includes a CSR (Corporate social
responsibility) expense of $1.7m in the year ended 31 March
2021.
East Africa delivered a strong business performance with revenue
growth of 15.0% in reported currency and 23.5% in constant
currency. The growth in revenue was evident across all key business
segments ; with voice up 15.4%, data up 23.9% and mobile money
growing 47.2% in constant currency. Constant currency revenue
growth of 23.5% was partially offset by currency devaluation,
mainly in Zambia and Kenya. Reported currency revenue grew by 15.4%
in Q4'21, and 23.9% in constant currency.
Voice revenue grew by 15.4% for the year, driven by customer
base growth of 9.2% and voice ARPU growth of 2.9%. Customer base
growth was driven largely by the expansion of our distribution
network, with the number of activating outlets up 15.5%. Voice ARPU
growth was driven largely by the increase in voice usage per
customer of 18.3%, to 330 minutes per customer per month. In Q4'21,
voice revenue grew by 15.5% in constant currency, mainly driven by
the customer base growth of 9.2% and ARPU growth of 5.3%.
Data revenue grew by 23.9%, driven by data customer base growth
of 21.5% and data ARPU growth of 1.1%. Growth was recorded across
all OpCos in the region, driven by expansion of our 4G network
infrastructure, with 76% of sites now on 4G in East Africa,
compared with 66% during the prior year. Total data usage on the
network grew by 70.7%, led by the 39.3% increase in data usage per
customer per month to 2.7 GB per customer from 1.9 GB in the prior
year, and from the data customer base growth detailed above.
During the period "pay-as-you-go" (PAYG) tariffs in certain
markets were revised and this resulted in change of revenue
allocation of bundled products between voice and data in these
tariffs. On a like-for-like basis, voice and data revenue growth
was 11% and 32.6% respectively.
Mobile money revenue grew by 47.2%, largely driven by growth in
Tanzania, Zambia, Uganda and Malawi. Revenue growth was driven by
16.4% growth in the customer base and 28.6% growth in the
transaction value per customer, thanks largely to the expansion of
our distribution network. The increase in transaction value per
customer was the main contributor to mobile money ARPU growth of
16.0%. Consistent with the year, Q4 posted mobile money revenue
growth of 47.8% in constant currency.
Underlying EBITDA margin was 45.7%, an improvement of 529 basis
points in reported currency and 541 basis points in constant
currency, led by both accelerated growth in revenue and efficiency
improvement in operating expenses.
Capital expenditure was $249m, up 37.5% due to planned network
expansion. Operating free cash flow was $382m, up 42%, largely due
to the growth in underlying EBITDA.
Francophone Africa (1)
Description Unit Year ended Quarter ended
of
measure
-------------- ---------- -------------------------------------------- --------------------------------------------
March-21 March-20 Reported Constant March-21 March-20 Reported Constant
currency currency currency currency
change change change change
% % % %
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Summarised
statement
of operations
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Underlying
revenue
(2) $m 964 859 12.3% 10.0% 260 215 20.9% 15.9%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Voice
revenue
(3) $m 541 525 2.9% 0.5% 143 127 12.4% 7.3%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Data revenue $m 254 189 34.4% 31.9% 70 51 38.6% 33.0%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Mobile money
revenue (4) $m 110 93 18.1% 15.0% 31 25 24.1% 18.2%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Other
revenue
(3) $m 96 86 11.5% 11.0% 25 22 14.8% 12.6%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Underlying
EBITDA $m 364 292 24.6% 21.7% 110 70 55.7% 49.1%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Underlying
EBITDA 372 363 942 935
margin % 37.7% 34.0% bps bps 42.1% 32.7% bps bps
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Depreciation
and
amortisation $m (207) (189) 9.7% 7.7% (52) (47) 11.7% 8.1%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Exceptional
item
(5) $m 14 (12) (217.8%) (209.6%) 1 - 0.0% 0.0%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Operating
profit
(6) $m 170 91 86.7% 80.5% 59 23 149.6% 131.6%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Capex $m 88 133 (33.9%) (33.9%) 32 40 (19.3%) (19.3%)
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Operating
free
cash flow $m 276 159 73.2% 68.2% 78 30 154.3% 136.7%
-------------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Operating
KPIs
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
ARPU $ 3.8 3.7 3.6% 1.5% 3.9 3.6 8.6% 4.1%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Total
customer
base million 23.1 20.2 14.5% 23.1 20.2 14.5%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Data customer
base million 6.7 5.4 24.6% 6.7 5.4 24.6%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Mobile money
customer
base million 3.6 2.8 30.6% 3.6 2.8 30.6%
-------------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
(1) The Francophone Africa business region includes Chad,
Democratic Republic of the Congo, Gabon, Madagascar, Niger,
Republic of the Congo, and The Seychelles.
(2) Underlying revenue includes intra-segment eliminations of
$36m for the year ended 31 March 2021 and $34m for the year ended
31 March 2020. It also excludes a one-time exceptional revenue of
$20m relating to a settlement in Niger in the year ended 31 March
2021.
(3) Voice revenue includes inter-segment revenue of $3m,
excluding inter-segment the voice revenue was $538m in the year
ended 31 March 2021. Voice revenue represents underlying revenue
excluding the impact of a settlement in Niger ($20m).
(4 () Mobile money revenue post intra-segment eliminations with
mobile services was $74m in the year ended 31 March 2021 and $59m
in the year ended 31 March 2020.
(5 () Operating exceptional items in the year ended 31 March
2021 includes exceptional revenue from a one-time settlement in
Niger amounting to $20m.
(6) Operating profit includes a CSR (Corporate Social
Responsibility) expense of $1.1m in the year ended 31 March
2021.
Our performance in Francophone Africa improved through the year,
with reported underlying revenue growth of 12.3% and constant
currency growth of 10%. The growth in reported currency is higher
than in constant currency due to appreciation of the Central
African franc. Performance across the region was mixed, with
revenue growth in Chad, Democratic Republic of the Congo (DRC),
Gabon and Niger partially offset by marginal decline in other
countries in the region. In Q4, revenue growth was significantly
higher, at 20.9% in reported currency and 15.9% in constant
currency.
Voice revenue growth was broadly flat at 0.5%. This marginal
underlying growth reflects 14.5% growth in the customer base
(largely coming later in the year) balanced with a decline in voice
ARPU due to a reduction in roaming revenue and interconnect rates.
Q4'21 reflected an improvement in voice revenues of 7.3%, driven by
customer base growth of 14.5% offset by a slight decline in voice
ARPU of 3.6%, mainly due to reductions in roaming revenue and
interconnect rates in Gabon and Chad. Q4'21 total voice minutes on
the network grew by 27.0% due to increased voice usage per customer
(up 14.1%) and customer base growth.
Data revenue grew by 31.9% driven by customer growth of 24.6%
and data ARPU growth of 2.8%. Data usage per customer increased
51.7% to 1.9 GB per month, from 1.3 GB per customer per month in
the prior year. The data customer base growth was driven largely by
the expansion of our 4G network, with 60% of total sites now on 4G,
and the success of our "more for more" bundle offerings, driving
data uptake by customers.
Mobile money revenue grew by 15.0% largely driven by a 30.6%
increase in the mobile money customer base, supported by the
expansion of our distribution network through more agents (up
29.6%) and Airtel Money branches (up 91.5%).
Underlying EBITDA margin was 37.7% during the period, an
improvement of 363 basis points in constant currency. The Q4'21
underlying EBITDA margin of 42.1%, reflects an improvement of 9.4
percentage points in constant currency, driven by revenue growth
and increased efficiency in operating expenses.
Capital expenditure was $88m, lower for the year, mainly due to
a significant network modernisation project last year. Operating
free cash flow was $276m, up 68.2% year on year, due to the
improvement in underlying EBITDA and lower capital expenditure.
Mobile services
Description Unit Year ended Quarter ended
of
measure
-------------- -------------------------------------------- --------------------------------------------
March-21 March-20 Reported Constant March-21 March-20 Reported Constant
currency currency currency currency
change change change change
% % % %
-------------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Summarised
statement
of operations
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Underlying
revenue
(1) $m 3,592 3,210 11.9% 17.6% 955 844 13.1% 19.3%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Underlying
EBITDA $m 1,639 1,372 19.5% 26.5% 456 366 24.7% 32.5%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Underlying
EBITDA 289 323 442 477
margin % 45.6% 42.7% bps bps 47.7% 43.3% bps bps
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Depreciation
and
amortisation $m (654) (595) 10.0% 14.6% (165) (146) 13.3% 18.1%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Operating
exceptional
items $m 14 3 307% 508.4% 1 - 0.0% 0.0%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Operating
profit
(2) $m 995 780 27.6% 37.0% 291 220 32.6% 42.5%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Capex $m 580 626 (7.4%) (7.4%) 185 240 (22.9%) (22.9%)
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Operating
free
cash flow $m 1,059 746 42.0% 57.9% 271 126 115.5% 152.2%
-------------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Operating
KPIs
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Mobile voice
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Voice
revenue
(3) $m 2,083 1,970 5.8% 11.0% 547 510 7.2% 12.8%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Customer
base million 118.2 110.6 6.9% 118.2 110.6 6.9%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Voice ARPU $ 1.5 1.6 (4.6%) 0.1% 1.5 1.6 (1.0%) 4.2%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Mobile data
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Data revenue $m 1,157 930 24.3% 31.2% 315 253 24.2% 31.7%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Data
customer
base million 40.6 35.4 14.5% 40.6 35.4 14.5%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Data ARPU $ 2.5 2.4 2.5% 8.2% 2.6 2.5 5.5% 11.8%
-------------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
(1) Mobile service underlying revenue after intersegment
eliminations amounted to $3,587m in the year ended 31 March 2021
and $3,207m in the year ended 31 March 2020. It also excludes a
one-time exceptional revenue of $20m relating to a settlement in
Niger in the year ended 31 March 2021.
(2) Operating profit includes a CSR (Corporate Social
Responsibility) expense of $3.5m in the year ended 31 March 2021
and $1m in the year ended 31 March 2020.
(3) Voice revenue represents underlying revenue excluding the
impact of a settlement in Niger ($20m).
Underlying revenue for mobile services grew by 11.9% in reported
currency and by 17.6% in constant currency, with both voice and
data revenue contributing to the growth.
Voice revenue increased 11.0% in constant currency, driven by
customer base growth of 6.9% driven by expansion of the
distribution network and network infrastructure. The s light
slowdown in customer base growth was due to new KYC regulations in
Nigeria, excluding Nigeria the customer base grew by 10.7%. Voice
usage per customer increased 16.4% to 234 minutes per customer,
resulting in overall minutes growth of 29.1%. Voice revenue in
Q4'21 grew by 12.8% with an improved performance across all
regions.
Data revenue grew by 31.2% in constant currency, largely driven
by an increase in the data customer base and data usage growth. The
data customer base grew by 14.5%, driven by expansion of our 4G
network infrastructure, with 76.5% of sites now operating on 4G,
compared with 64.7% in the prior year, and increased smartphone
penetration up 1 percentage points. The data customer base as a
proportion of total customers reached 34.3%, an increase of 2.3
percentage points. Total data usage on our network grew by 74.8%,
led by an increase in data usage per customer and the growth of the
data customer base. Data usage per customer per month was 2.6 GB,
up 44.2% year on year, largely driven by our 4G network expansion
and increasingly popular data bundle offerings. Growing penetration
on our 4G network helped drive up data ARPU growth to 8.2%, with 4G
data usage more than doubling and contributing 62.2% to total data
usage on the network in Q4'21.
Data revenue contribution reached 29.8% of total Group revenue,
up from 27.2% in the prior year.
Mobile money
Description Unit Year ended Quarter ended
of
measure
-------------- -------------------------------------------- --------------------------------------------
March-21 March-20 Reported Constant March-21 March-20 Reported Constant
currency currency currency currency
change change change change
% % % %
-------------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Summarised
statement
of operations
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Revenue (1) $m 401 311 29.1% 35.5% 110 83 32.7% 38.7%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Underlying
EBITDA $m 195 150 30.5% 36.2% 54 39 36.5% 42.1%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Underlying
EBITDA 138 117
margin % 48.7% 48.2% 52 bps 27 bps 48.7% 47.3% bps bps
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Depreciation
and
amortisation $m (10) (7) 48.2% 54.0% (4) (3) 34.6% 40.4%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Operating
profit $m 185 143 29.6% 35.3% 50 36 36.7% 42.3%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Capex $m 32 12 165.8% 165.8% 25 5 357.7% 357.7%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Operating
free
cash flow $m 163 138 18.7% 24.9% 29 34 (15.1%) (10.2%)
-------------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Operating
KPIs
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Mobile money
key KPIs
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Transaction
value $m 46,009 31,598 45.6% 53.6% 12,538 8,266 51.7% 59.2%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Active
customers million 21.7 18.3 18.5% 21.7 18.3 18.5%
-------------- ---------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
Mobile money
ARPU $ 1.7 1.6 1.6% 6.6% 1.7 1.6 6.0% 10.8%
-------------- --------- --------- ---------- ---------- --------- --------- ---------- ----------
(1) Mobile money service revenue post inter-segment eliminations
with mobile services was $301m in the year ended 31 March 2021 and
$220m in the year ended 31 March 2020.
Mobile money revenue grew by 35.5% to $401m driven by 18.5%
growth of the customer base and transaction value growth of 53.6%.
Customer base g rowth was largely driven by expansion of our
distribution network, as we continued to invest in exclusive kiosks
and mobile money branches. Throughout the year, the expansion of
our mobile money product portfolio, through partnerships with
leading financial institutions, and the expansion of our merchant
ecosystem further strengthened our mobile money propositions.
Underlying EBITDA for mobile money grew by 30.5% to $195m in
reported currency. In constant currency, underlying EBITDA grew by
36.2%. Underlying EBITDA margin was 48.7%, an improvement of 27
basis points. The growth in total transaction value in constant
currency, of 53.6%, was driven by customer base growth of 18.5% and
growth in the transaction value per customer per month of 20.9%.
The Q4'21 annualised transaction value reached $51bn in constant
currency, with mobile money revenue accounting for 10.6% of total
revenue in the quarter.
The mobile money customer base reached 21.7 million, up 18.5%
from the prior year, with Airtel Money customers now representing
18.3% of our total customer base, an increase of 1.8 percentage
points. Mobile money ARPU increased 6.6%, driven by the increase in
transaction values and a higher contribution from merchant
payments, cash transactions, P2P transfers and mobile services
recharges through Airtel Money.
Forward looking statements
This document contains certain forward-looking statements
regarding our intentions, beliefs or current expectations
concerning, amongst other things, our results of operations,
financial condition, liquidity, prospects, growth, strategies and
the economic and business circumstances occurring from time to time
in the countries and markets in which the Group operates.
These statements are often, but not always, made through the use
of words or phrases such as "believe," "anticipate," "could,"
"may," "would," "should," "intend," "plan," "potential," "predict,"
"will," "expect," "estimate," "project," "positioned," "strategy,"
"outlook", "target" and similar expressions.
It is believed that the expectations reflected in this document
are reasonable, but they may be affected by a wide range of
variables that could cause actual results to differ materially from
those currently anticipated.
All such forward-looking statements involve estimates and
assumptions that are subject to risks, uncertainties and other
factors that could cause actual future financial condition,
performance and results to differ materially from the plans, goals,
expectations and results expressed in the forward-looking
statements and other financial and/or statistical data within this
communication.
Among the key factors that could cause actual results to differ
materially from those projected in the forward-looking statements
are uncertainties related to the following: the impact of
competition from illicit trade; the impact of adverse domestic or
international legislation and regulation; changes in domestic or
international tax laws and rates; adverse litigation and dispute
outcomes and the effect of such outcomes on Airtel Africa's
financial condition; changes or differences in domestic or
international economic or political conditions; the ability to
obtain price increases and the impact of price increases on
consumer affordability thresholds; adverse decisions by domestic or
international regulatory bodies; the impact of market size
reduction and consumer down-trading; translational and
transactional foreign exchange rate exposure; the impact of serious
injury, illness or death in the workplace; the ability to maintain
credit ratings; the ability to develop, produce or market new
alternative products and to do so profitably; the ability to
effectively implement strategic initiatives and actions taken to
increase sales growth; the ability to enhance cash generation and
pay dividends and changes in the market position, businesses,
financial condition, results of operations or prospects of Airtel
Africa.
Past performance is no guide to future performance and persons
needing advice should consult an independent financial adviser. The
forward-looking statements contained in this document reflect the
knowledge and information available to Airtel Africa at the date of
preparation of this document and Airtel Africa undertakes no
obligation to update or revise these forward-looking statements,
whether as a result of new information, future events or otherwise.
Readers are cautioned not to place undue reliance on such
forward-looking statements.
No statement in this communication is intended to be, nor should
be construed as, a profit forecast or a profit estimate and no
statement in this communication should be interpreted to mean that
earnings per share of Airtel Africa plc for the current or any
future financial periods would necessarily match, exceed or be
lower than the historical published earnings per share of Airtel
Africa plc.
Financial data included in this document are presented in US
dollars rounded to the nearest million. Therefore, discrepancies in
the tables between totals and the sums of the amounts listed may
occur due to such rounding. The percentages included in the tables
throughout the document are based on numbers calculated to the
nearest $1,000 and therefore minor rounding differences may result
in the tables. Growth metrics are provided on a constant currency
basis unless otherwise stated. The Group has presented certain
financial information on a constant currency basis. This is
calculated by translating the results for the current financial
year and prior financial year at a fixed 'constant currency'
exchange rate, which is done to measure the organic performance of
the Group. Growth rates for business and product segments are
provided in constant currency as this better represents the
underlying performance of the business.
Consolidated Financial Statements
Consolidated Statement of Comprehensive Income
(All amounts are in US dollar millions unless otherwise
stated)
For the year ended
-----------------------------------------------------
Notes 31 March 2021 31 March 2020
Income
Revenue 5 3,908 3,422
Other income 11 17
3,919 3,439
Expenses
Network operating expenses 694 628
Access charges 376 376
License fee / spectrum usage charges 198 189
Employee benefits expense 275 234
Sales and marketing expenses 187 148
Impairment loss/(reversal) on financial assets 7 (2)
Other operating expenses 382 333
Depreciation and amortisation 681 632
2,800 2,538
Operating profit 1,119 901
Finance costs 432 440
Finance income (9) (67)
Non-operating income - (70)
Share of profit of associate (1) (0)
Profit before tax 697 598
Income tax expense 7 282 190
Profit for the year 415 408
Profit before tax (as presented above) 697 598
Less: Exceptional items (net) 6 (14) (65)
Underlying profit before tax 683 533
------------------------------------------------------- ------ -------------- -------------------------------------
Profit after tax (as presented above) 415 408
Less: Exceptional items (net) 6 (50) (112)
Underlying profit after tax 365 296
------------------------------------------------------- ------ -------------- -------------------------------------
For the year ended
-----------------------------------------------------
Notes 31 March 2021 31 March 2020
Profit for the year (continued from previous page) 415 408
Other comprehensive income ('OCI')
Items to be reclassified subsequently to profit or
loss:
Net losses due to foreign currency translation
differences (138) (219)
Net (loss)/gain on net investments hedge (11) 5
Net loss on cash flow hedge - (2)
(149) (216)
-------------- -------------------------------------
Items not to be reclassified subsequently to profit
or loss:
Re-measurement (loss)/gain on defined benefit
plans (0) 1
Tax credit/(expense) on above 0 (0)
(0) 1
-------------- -------------------------------------
Other comprehensive loss for the year (149) (215)
-------------- -------------------------------------
Total comprehensive income for the year 266 193
============== =====================================
Profit for the year attributable to: 415 408
Owners of the Company 339 370
Non-controlling interests 76 38
Other comprehensive loss for the year attributable
to: (149) (215)
Owners of the Company (140) (224)
Non-controlling interests (9) 9
Total comprehensive income for the year attributable
to: 266 193
Owners of the Company 199 146
Non-controlling interests 67 47
Earnings per share
Basic 8 9.0c 10.3c
Diluted 8 9.0c 10.3c
Consolidated Statement of Financial Position
(All amounts are in US dollar millions, unless otherwise
stated) As of
Notes 31 March 2021 31 March 2020
Assets
Non-current assets
Property, plant and equipment 9 2,066 1,832
Capital work-in-progress 9 166 259
Right of use assets 799 639
Goodwill 10 3,835 3,943
Other intangible assets 558 456
Intangible assets under development 177 30
Investment in associate 4 3
Financial assets
- Investments 0 0
- Derivative instruments 6 0
- Security deposits 8 7
- Others 9 1
Income tax assets (net) 33 39
Deferred tax assets (net) 314 333
Other non-current assets 112 112
-------------- ----------------------------------
8,087 7,654
Current assets
Inventories 7 3
Financial assets
- Derivative instruments 6 10
- Trade receivables 113 132
- Cash and cash equivalents 11 813 1,010
- Other bank balances 11 282 6
- Balance held under mobile money trust 440 295
- Others 66 66
Other current assets 147 149
Assets of disposal group classified as held for
sale 17 31 -
-------------- ----------------------------------
1,905 1,671
Total assets 9,992 9,325
============== ==================================
As of
Notes 31 March 2021 31 March 2020
Current liabilities
Financial liabilities
- Borrowings 12 342 235
- Current maturities of long-term borrowings 12 1,126 429
- Lease liabilities 240 199
- Derivative instruments 7 3
- Trade payables 366 416
- Mobile money wallet balance 432 292
- Others 448 461
Provisions 65 65
Deferred revenue 135 124
Current tax liabilities (net) 173 149
Other current liabilities 151 115
Liabilities of disposal group classified as
held for sale 17 19 -
-------------- ----------------------------------
3,504 2,488
Net current liabilities (1,599) (817)
Non-current liabilities
Financial liabilities
- Borrowings 12 1,871 2,446
- Lease liabilities 1,037 970
- Derivative instruments 6 4
- Others 91 15
Provisions 25 23
Deferred tax liabilities (net) 81 69
Other non-current liabilities 24 29
-------------- ----------------------------------
3,135 3,556
Total liabilities 6,639 6,044
============== ==================================
Net Assets 3,353 3,281
============== ==================================
Equity
Share capital 13 3,420 3,420
Retained earnings 2,975 2,805
Other reserves (2,990) (2,837)
-------------- ----------------------------------
Equity attributable to owners of the company 3,405 3,388
Non-controlling interests ('NCI') (52) (107)
-------------- ----------------------------------
Total equity 3,353 3,281
============== ==================================
The consolidated financial statements (company registration number: 11462215) were approved
by the Board of directors and authorised for issue on 11 May 2021 and were signed on its behalf
by:
Raghunath Mandava
Chief Executive Officer
11 May 2021
Consolidated Statement of Changes in Equity (All amounts are in US dollar millions, unless
otherwise stated)
Equity attributable to owners of the company Non-controlling Total
interests (NCI) equity
------------------------------------------------------------------------------------------ ----------------
Share Capital Share Retained Other reserves Equity
premium earnings attributable
to owners of
the company
-------------------------- -------- --------- -------------------------- ------------- ----------------
No of shares Amount Transactions Other
with NCI components
reserve of equity
------------- -----------
As of 1 April
2019 3,081,744,577 3,082 470 1,688 (580) (2,034) 2,626 (196) 2,430
Profit for the
year - - - 370 - - 370 38 408
Other
comprehensive
loss - - - 1 - (225) (224) 9 (215)
--------------- ----------- ------------- ----------------
Total
comprehensive
income / (loss) - - - 371 - (225) 146 47 193
Transaction with
owners of equity
Reduction in
nominal value
of shares [Note
13(1)] - (1,541) - - - - (1,541) - (1,541)
Issue of
deferred share
capital [Note
13(1)] 3,081,744,577 1,541 - - - - 1,541 - 1,541
Issue of share
capital [Note
13(2)] 676,406,927 338 342 - - - 680 - 680
Issue of share
capital to NCI - - - - - - - 13 13
Share issue
costs - - (3) (14) - - (17) - (17)
Share
stabilisation
proceeds - - - - - 7 7 - 7
Employee
share-based
payment
expenses - - - - - 0 0 - 0
Reversal of
indemnities - - - 64 - - 64 - 64
Court approved
reduction in
share premium - - (809) 809 - - - - -
Transactions
with NCI - - - - (5) - (5) 36 31
Dividend to
owners of the
company - - - (113) - - (113) - (113)
Dividend
(including tax)
to NCI - - - - - - - (7) (7)
As of 31 March
2020 6,839,896,081 3,420 - 2,805 (585) (2,252) 3,388 (107) 3,281
=============== ========= ======== ========= ============= =========== ============= ================ =========
Profit for the
year - - - 339 - - 339 76 415
Other
comprehensive
loss - - - (0) - (140) (140) (9) (149)
--------------- -----------
Total
comprehensive
income / (loss) - - - 339 - (140) 199 67 266
Transaction with
owners of equity
Employee
share-based
payment
expenses - - - (0) - 0 0 - 0
Purchase of own
shares - - - - - (4) (4) - (4)
Transactions
with NCI - - - - (9) - (9) 1 (8)
Dividend to
owners of the
company [Note 4
(a) & (b)] - - - (169) - - (169) - (169)
Dividend
(including tax)
to NCI (1) - - - - - - - (13) (13)
As of 31 March
2021 6,839,896,081 3,420 - 2,975 (594) (2,396) 3,405 (52) 3,353
=============== ========= ======== ========= ============= =========== ============= ================ =========
(1) Dividend to NCI includes tax of $0m.
Consolidated Statement of Cash Flows (All amounts are in US dollar millions, unless otherwise
stated)
For the year ended
----------------------------------------------------
31 March 2021 31 March 2020
-------------- ------------------------------------
Cash flows from operating activities
Profit before tax 697 598
Adjustments for -
Depreciation and amortization 681 632
Finance income (9) (67)
Finance cost 432 440
Share of profit of associate (1) (0)
Non-operating income adjustments - (70)
Other adjustments (1) (15) (45)
Operating cash flow before changes in working capital 1,785 1,488
Changes in working capital
Increase in trade receivables (8) (11)
Increase in inventories (4) (1)
Decrease in trade payables (38) (15)
Increase in mobile money wallet balance 139 53
Increase in provisions 1 2
Increase in deferred revenue 17 20
Decrease in income received in advance (1) (11)
Increase in other financial and non-financial liabilities 18 4
Increase in other financial and non-financial assets (48) (28)
Net cash generated from operations before tax 1,861 1,501
Income taxes paid (195) (114)
Net cash generated from operating activities (a) 1,666 1,387
-------------- ------------------------------------
Cash flows from investing activities
Purchase of property, plant and equipment and capital
work-in-progress (645) (656)
Purchase of intangible assets (270) (155)
Investment in term deposits with banks (257) -
Payment of deferred consideration for past business
combination - (19)
Interest received 14 29
Net cash used in investing activities (b) (1,158) (801)
-------------- ------------------------------------
Cash flows from financing activities
Proceeds from issue of shares to owners of the Company - 680
Proceeds from sale of shares to non-controlling interests - 34
Acquisition of non-controlling interests (7) -
Purchase of own shares by ESOP trust (4) -
Payment of share issue expenses - (17)
Proceeds from borrowings 407 174
Repayment of borrowings (265) (720)
Repayment of lease liabilities (208) (189)
Dividend paid to non-controlling interests (9) (5)
Dividend paid to owners of the Company (169) (113)
Interest and other finance charges paid (317) (318)
Share stabilisation proceeds - 7
Proceeds from cancellation of derivatives - 122
Payment on maturity of derivatives (3) (25)
Net cash (used) in/generated from financing activities (c) (575) (370)
-------------- ------------------------------------
(Decrease)/increase in cash and cash equivalents during the
year (a+b+c) (67) 216
Currency translation differences relating to cash and cash
equivalents (17) 1
Cash and cash equivalent as at beginning of the year 1,087 870
Cash and cash equivalents as at end of the year (Note 11) (2) 1,003 1,087
============== ====================================
1. For the year ended 31 March 2021, this mainly includes
recognition of revenue pertaining to earlier years on a cumulative
catch-up basis, arising out of a settlement agreement entered with
a customer in one of the Group's subsidiaries. For the year ended
31 March 2020, this mainly includes deferment of customer
acquisition costs and reversal of provision for capital work in
progress.
2. Includes balance held under mobile money trust of USD 440m
(2020: USD 295m) on behalf of mobile money customers which are not
available for use by the Group.
Notes to Consolidated Financial Statements
(All amounts are in US dollar millions, unless otherwise
stated)
1. Corporate information
Airtel Africa plc ('the company') is a public company limited by
shares incorporated in the United Kingdom under the Companies Act
2006 and is registered in England and Wales (registration number
11462215). The registered address of the company is First Floor,
53/54 Grosvenor Street, London W1K 3HU, United Kingdom. The company
listed on London Stock Exchange ('LSE') on 3 July 2019 and on
Nigerian Stock Exchange ('NSE') on 9 July 2019. The company is a
subsidiary of Airtel Africa Mauritius Limited ('the parent'), a
company registered in Mauritius. The registered address of the
parent is C/o IQ EQ Corporate Services (Mauritius) Ltd., 33, Edith
Cavell Street, Port Louis, 11324, Mauritius.
The company, together with its subsidiary undertakings
(hereinafter referred to as 'the Group') has operations in Africa.
The principal activities of the Group and its associate consist of
provision of telecommunications and mobile money services.
2. Basis of preparation
The results for the year ended 31 March 2021 are an abridged
statement of the full annual report which was approved by the Board
of directors on 11 May 2021 and signed on its behalf on 11 May
2021. The consolidated financial statements within the full annual
report are prepared in accordance with the Companies Act 2006 and
IFRS standards adopted pursuant to Regulation (EC) No 1606/2002 as
it applies in the European Union. The auditor's report on those
consolidated financial statements was unqualified, did not draw
attention to any matters by way of emphasis without qualifying
their report and did not contain statements under section 498(2) or
498(3) of the Companies Act 2006.
The financial information set out above does not constitute the
company's statutory accounts for the years ended 31 March 2021 and
2020, but is derived from those accounts. Statutory accounts for
March 2020 have been delivered to the Registrar of Companies and
those for 2021 will be delivered following the company's annual
general meeting.
The financial information included in this release announcement
does not itself contain sufficient information to comply with IFRS.
The company will publish full financial statements that comply with
IFRS, in May 2021.
All the amounts included in the financial statements are
reported in United States dollars, with all values rounded to the
nearest millions (USD m) except when otherwise indicated. Further,
amounts which are less than half a million are appearing as
'0'.
3. Going concern
These financial statements have been prepared on a going concern
basis. In making this going concern assessment, the Group has
considered cash flow projections to June 2022 under both base and
reasonable worst case scenarios taking into considerations its
principal risks and uncertainties including a reduction in revenue
and EBITDA, the potential impact of Covid-19 and a significant
devaluation of the various currencies in the markets in which the
Group operates (including Nigerian Naira) and the impact on the
possible inability of repatriating funds from subsidiaries. As part
of this evaluation, the Group has considered available ways to
mitigate these risks and uncertainties and has also considered that
the Group has committed undrawn facilities of USD 1,140m as of the
date of authorisation of these financial statements (out of which
USD 1,036m are due to expire beyond the next 12 months), which will
fulfil the Group's cash flow requirement under both base and
reasonable worst-case scenarios.
We have USD 2,384m in long-term bonds, with the first repayment
of USD 879m (EURO 750m) due in May 2021 which will be paid through
a mix of cash held as well as from the proceeds of a USD 500m
inaugural multi-bank long-term facility (part of the USD 1,036m
undrawn facilities mentioned above) entered into by Airtel Africa
plc in April 2021.
Having considered the above factors impacting the Group's
businesses, including the scheduled EURO bond repayment of USD 879m
(EURO 750m) due in May 2021, the impact of downside sensitivities,
and the mitigating actions available, including a reduction and
deferral of capital expenditure, the Board is satisfied that the
Group has adequate resources to continue in operational existence
for the foreseeable future. Accordingly, the Board continues to
adopt the going concern basis of accounting in preparing the Group
and company financial statements.
4. Significant transactions/new developments
a) The shareholders declared a final dividend of 3 cents per
ordinary share for the year ended 31 March 2020, which was paid on
24 July 2020 to the holders of ordinary shares on the register of
members at the close of business on 3 July 2020.
b) The interim dividend of 1.5 cents per share was approved by
the Board on 22 October 2020 paid on 11 December 2020 to the
holders of ordinary shares on the register of members at the close
of business on 13 November 2020.
c) During the year, Airtel Uganda Limited was issued with a
National Telecom Operator licence under the new Licensing Regime
applicable in Uganda. Thus USD 65m (i.e. total payment of USD 74m
less recoverable VAT of USD 9m) has been capitalised to intangible
assets as a result. The license takes effect from 1 July 2020 and
is for a period of 20 years.
In Airtel Nigeria, the application for renewal of the spectrum
licences (due to expire on 30 November 2021) in the 900MHz and
1800MHz bands have been approved for a period of ten years by the
licensing authority. Under the terms of the spectrum licences,
Airtel Nigeria has paid USD 182m in respect of the licence renewal
fees. The amount has been held under intangible assets under
development being an advance and shall be capitalized and
subsequently amortised with effect from 1 December 2021.
d) On 18 March 2021, the Group entered into an agreement, under
which The Rise Fund, the global impact investing platform of
leading alternative investment firm TPG, will invest USD 200m in
Airtel Mobile Commerce BV ("AMC BV"), a wholly owned subsidiary of
the Group, by way of purchase of a portion of AMC BV's shareholding
from the Group. The transaction will close in two stages i.e. upon
receipt of USD 150m at first close and USD 50m at second close
based on closing conditions defined in sale agreements. On
respective closings, the Group will record a transaction with
non-controlling interest in equity. Further, under the terms of the
transaction, and in very limited circumstances, TPG would have the
option, so as to provide liquidity to them, to sell its shares in
AMC BV to Airtel Africa or its affiliates at fair market value
subject to a minimum and maximum payable amount. As of 31 March
2021, there are no accounting implications under this
transaction.
e) On 31 March 2021, the Group entered into an agreement under
which Mastercard, will invest USD 100m in Airtel Mobile Commerce
B.V. ('AMC BV'), a wholly owned subsidiary of the Group, by way of
purchase of a portion of AMC BV's shareholding from the Group. The
transaction will close in two stages i.e. upon receipt of USD 75m
at first close and USD 25m at second close based on closing
conditions defined in sale agreements. On respective closings, the
Group will record transaction with non-controlling interest in
equity. Further, under the terms of the transaction, and in very
limited circumstances, Mastercard would have the option, so as to
provide liquidity to them, to sell its shares in AMC BV to Airtel
Africa or its affiliates at fair market value subject to a minimum
and maximum payable amount. As of 31 March 2021, there are no
accounting implications under this transaction.
f) On 23 March 2021, the Group signed two separate agreements to
sell its telecommunications tower companies in Madagascar and
Malawi at an aggregate consideration of USD 108m to Helios Towers
plc under a sale and leaseback arrangement. The completion of the
sale of the tower company holding 494 towers in Madagascar is
considered highly probable and is only subject to conditions that
are usual and customary. Consequently, the Group has classified the
assets and liabilities of the Madagascar tower company as held for
sale as of 31 March 2021.
The completion of the sale of company holding 735 towers in
Malawi, in addition to certain customary conditions, is also
subject to a non-customary condition which is beyond the Group's
control. As of 31 March 2021, the Group cannot ascertain the
likelihood of this condition as being highly probable and
consequently has not classified the assets of the Malawian tower
company as held for sale.
On the same date, the Group also entered into exclusive
Memorandum of Understanding agreements with Helios for the
potential sale of its tower assets in Chad and Gabon, however since
no binding sale agreement has been signed between the parties, the
assets are not considered as held for sale as of 31 March 2021.
On 22 February 2021, the Group signed an agreement to sell 162
towers in Rwanda to IHS Rwanda Ltd under a sale and lease back
arrangement. As at 31 March 2021, the sale of such tower assets are
subject only to usual and customary conditions and the sale is
highly probable within the next 12 months. Consequently, the Group
has classified such assets and related liabilities as held for
sale.
For disclosures on the Madagascar and Rwanda assets held for
sale, please refer note 17.
5. Segmental Information
The Group's segment information is provided on the basis of
geographical clusters to the Group's chief executive officer (chief
operating decision maker - 'CODM') for the purposes of resource
allocation and assessment of performance. The Group's reporting
segments are as follows:
Nigeria
East Africa - Comprising operations in Kenya, Uganda, Rwanda,
Tanzania, Malawi and Zambia
Francophone Africa - Comprising operations in Niger, Gabon,
Chad, Congo B, DRC, Madagascar and Seychelles
Each segment derives revenue from mobile services, mobile money
and other services. Expenses, assets and liabilities primarily
related to the corporate headquarters of the Group are presented as
Unallocated Items.
The amounts reported to CODM are based on the accounting
principles used in the preparation of the financial statements.
Each segment's performance is evaluated based on segment revenue
and segment result.
The segment result is Underlying EBITDA i.e. earnings before
interest, tax, depreciation and amortisation before exceptional
items as adjusted for charitable donation. This is the measure
reported to the CODM for purposes of resource allocation and
assessment of segment performance.
Inter-segment pricing and terms are reviewed and changed by the
management to reflect changes in market conditions and changes to
such terms are reflected in the period in which the changes
occur.
Inter-segment revenues eliminated upon consolidation of
segments/Group accounting policy alignments are reflected in the
'Eliminations/Adjustments' column.
Segment assets and segment liabilities comprise those assets and
liabilities directly managed by each segment. Segment assets
primarily include receivables, property, plant and equipment,
capital work in progress, right-to-use assets, intangibles assets,
inventories and cash and cash equivalents. Segment liabilities
primarily include operating liabilities. Segment capital
expenditure comprises investment in property, plant and equipment,
capital work in progress, intangible assets (excluding licenses)
and capital advances.
Investment elimination upon consolidation and resulting goodwill
impacts are reflected in the 'elimination /adjustment' column.
Summary of the segmental information and disaggregation of
revenue for the year ended and as of 31 March 2021 is as
follows:
Nigeria East Africa Francophone Africa Unallocated Eliminations Total
-------- ------------ ------------------- ------------ ------------- -------
Revenue from external customers
Voice revenue 896 649 558 0 - 2,103
Data revenue 549 354 254 - - 1,157
Mobile money revenue(1) 0 227 74 - - 301
Other revenue(2) 104 147 96 - - 347
1,549 1,377 982 0 - 3,908
Inter-segment revenue 3 4 3 - (10) -
Total revenue 1,552 1,381 985 0 (10) 3,908
Segment results: Underlying
EBITDA 839 631 364 (30) (12) 1,792
Less:
Depreciation and amortisation 236 221 207 2 15 681
Finance costs 432
Finance income (9)
Share of profit of associate (1)
Charitable donation 1 2 1 2 - 6
Exceptional items pertaining to
operating profit - - (14) - - (14)
Profit before tax 697
Other segment items
Capital expenditure 275 249 88 2 - 614
--------------------------------- -------- ------------ ------------------- ------------ ------------- -------
As of 31 March 2021
Segment assets 1,889 2,042 1,791 25,622 (21,352) 9,992
Segment liabilities 1,192 2,989 2,715 16,895 (17,152) 6,639
Investment in associate
(included in segment assets
above) - - 4 - - 4
(1) intra-segment elimination of USD 100m adjusted with Mobile
money revenue. It includes USD 64m pertaining to East Africa and
balance USD 36m pertaining to Francophone Africa.
(2) it includes messaging, value added services, enterprise,
site sharing and handset sale revenue.
Summary of the segmental information and disaggregation of
revenue for the year ended and as of 31 March 2020 is as
follows:
Nigeria East Francophone Unallocated Eliminations Total
Africa Africa
-------- ---------- ------------ ------------ ------------- -------------------------
Revenue from external
customers
Voice revenue 848 605 522 (5) - 1,970
Data revenue 435 307 189 - - 930
Mobile money
revenue(1) 4 157 59 - - 220
Other revenue(2) 84 131 86 - - 302
1,371 1,200 856 (5) - 3,422
Inter-segment revenue 2 1 3 - (6) -
Total revenue 1,373 1,201 859 (5) (6) 3,422
Segment results:
Underlying EBITDA 744 485 292 2 (8) 1,515
Less:
Depreciation and
amortisation
(excluding exceptional
items) 183 229 189 2 2 605
Finance costs 440
Finance income (67)
Non-operating Income,
(net) (70)
Share of loss of
associate (0)
Charitable donation 1 0 0 4 - 5
Exceptional items
pertaining to
operating profit (5) (10) 12 - 7 4
Profit before tax 598
Other segment items
Capital expenditure 325 181 133 3 - 642
------------------------ -------- ---------- ------------ ------------ ------------- -------------------------
As of 31 March 2020
Segment assets 1,476 1,672 1,663 26,202 (21,688) 9,325
Segment liabilities 1,078 2,678 2,632 16,985 (17,329) 6,044
Investment in associate
(included in segment
assets above) - - 3 - - 3
(1) intra-segment elimination of USD 91m adjusted with mobile
money revenue. It includes USD 57m pertaining to East Africa and
balance USD 34m pertaining to Francophone Africa.
(2) it includes messaging, value added services, enterprise,
site sharing and handset sale revenue.
Geographical information disclosure on non-current assets (PPE,
CWIP, ROU, Intangible assets including goodwill and intangible
assets under development):
As of
------------------------------------------------
31 March 2021 31 March 2020
-------------- --------------------------------
United Kingdom 1 1
Nigeria 1,455 1,142
Netherlands 3,782 3,891
Others 2,363 2,126
Total 7,601 7,160
============== ================================
6. Exceptional items
Underlying profit/loss before tax excludes the following
exceptional items: For the year ended
--------------------------------------------------
31 March 2021 31 March 2020
-------------- ----------------------------------
Profit before tax 697 598
Add: Exceptional items
- Service revenues (1) (20) -
- Employee restructuring (2) 6 -
- Reversal of indemnities (3) - (72)
- Network modernisation (4) - 27
- Deferment of customer acquisition cost (5) - (27)
- Share issue and IPO related expenses (6) - (7)
(14) (65)
Underlying profit before tax 683 533
============== ==================================
(1) represents recognition of revenue pertaining to earlier
years on a cumulative catch-up basis, arising out of a settlement
agreement entered with a customer in one of the Group's
subsidiaries in Niger.
(2) comprises the cost of employee restructuring completed
during the year ended 31 March 2021 in one of the Group's
subsidiaries, including settlement of severance pay defined benefit
plans.
(3) represents expiry of indemnity obligation on the publication
of registration document of the company. This is presented as
'Non-operating income' in the statement of comprehensive
income.
(4) this relates to the accelerated depreciation which arose on
non-usable uninstalled equipment as part of the modernisation
programme. This specific programme started in 2017 and was
completed during the year ended 31 March 2020.
(5) represents the impact relating to previous periods of USD
27m on deferment of customer acquisition costs following
reassessment of expected average customer life.
(6) includes equity issuance related expenses under IPO of the
company including cost and fair value changes of derivatives taken
for IPO proceeds and equity issuance related expenses of rights
issue in a subsidiary, Congo B.
Underlying profit after tax excludes the following exceptional
items:
For the year ended
--------------------------------------------------
31 March 2021 31 March 2020
-------------- ----------------------------------
Profit after tax 415 408
-Exceptional items (as above) (14) (65)
- Tax on above exceptional items - 4
- Deferred tax asset recognition (1) (2) (36) (51)
(50) (112)
-------------- ----------------------------------
Underlying profit after tax 365 296
============== ==================================
(1) During the year ended 31 March 2021, the Group recognised
deferred tax assets in Airtel Tanzania. Airtel Tanzania has carried
forward losses and temporary differences on which deferred tax was
not recognized in the past. Considering that Airtel Tanzania has
been in continuous and cumulative profits and on the basis of
likely timing and the level of future taxable profits, the Group
has determined that it is now probable that taxable profits will be
available against which the tax losses and temporary differences
can be utilized in the foreseeable future. Consequently, the
deferred tax asset recognition criteria are met, leading to
recognition of USD 36m during the year ended 31 March 2021.
(2) During the year ended 31 March 2020, the Group recognised
deferred tax assets in Airtel DRC on meeting the recognition
criteria.
Profit attributable to non-controlling interests include benefit
of USD 19m and USD 3m during the year ended 31 March 2021 and 2020
respectively, relating to the above exceptional items.
7. Income tax
The tax expense is as follows:
For the year ended
31 March 2021 31 March 2020
-------------- --------------------------------
Current tax 242 176
Deferred tax 40 14
Income Tax expense 282 190
============== ================================
8. Earnings per share ('EPS')
The details used in the computation of basic EPS:
For the year ended
31 March 2021 31 March 2020
-------------- --------------------------
Profit for the year attributable to owners of the Company 339 370
Weighted average ordinary shares outstanding for basic EPS(1) 3,757,550,081 3,585,634,531
Basic EPS 9.0c 10.3c
============== ==========================
(1) During the year ended 31 March 2020, the company as part of
its IPO issued 676,406,927 shares.
The details used in the computation of diluted EPS:
For the year ended
31 March 2021 31 March 2020
------------------- -----------------------------
Profit for the year attributable to owners of the Company 339 370
Weighted average ordinary shares outstanding for diluted
EPS(1)(2)(3) 3,759,122,452 3,586,678,328
Diluted EPS 9.0c 10.3c
=================== =============================
(1) The difference between the basic and diluted number of shares
at the end of March 2021 being 1,572,371 (March 2020: 1,150,280)
relates to awards committed but not yet issued under the Group's
share-based payment schemes.
(2) Refer Note 13 for detail on the ordinary share movements as part
of the initial public offering process during the year ended 31 March
2020.
(3) Deferred shares have not been considered for EPS computation
as they do not have right to participate in profits.
9. Property, plant and equipment ('PPE')
The following table presents the reconciliation of changes in
the carrying value of PPE for the year ended 31 March 2021 and 31
March 2020:
Leasehold Building Land Plant and Furniture Vehicles Office Computer Total Capital work in
Improvements Equipment & Fixture Equipment progress (3)
(2)
-------------- ---------- ------ ----------- ----------- ---------- ----------- ---------- ------- -----------------
Gross carrying
value
Balance as of 1
April 2019 50 52 30 1,957 18 27 29 670 2,833 367
Additions /
capitalization 2 0 0 689 13 0 11 34 749 655
Disposals /
adjustments
(1) (0) - (3) (17) (3) (3) (0) (8) (34) (747)
Exchange
differences (2) (5) (1) (221) (3) (0) (3) (35) (270) (16)
Balance as of 31
March 2020 50 47 26 2,408 25 24 37 661 3,278 259
Additions /
capitalisation 1 1 0 648 14 0 9 26 699 611
Disposals /
adjustments
(1) (1) (0) (0) (32) (1) (0) (0) 0 (34) (696)
Transferred to
assets held for
sale - - - (77) - 0 - (0) (77) (0)
Exchange
differences 0 (2) 1 (89) (1) 0 (1) (11) (103) (8)
Balance as of
31 March 2021 50 46 27 2,858 37 24 45 676 3,763 166
Accumulated
Depreciation
Balance as of 1
April 2019 41 13 2 506 8 25 14 627 1,236 -
Charge 3 3 0 362 6 0 8 24 406 -
Disposals /
adjustments
(1) (0) - (1) (12) (3) (3) (0) (2) (21) -
Exchange
differences (2) (1) 0 (134) (2) (0) (3) (33) (175) -
Balance as of 31
March 2020 42 15 1 722 9 22 19 616 1,446 -
Charge 2 3 0 341 6 1 9 27 389 -
Disposals /
adjustments
(1) (0) (0) 0 (28) (0) (1) (0) 1 (28) -
Transferred to
assets held for
sale - - - (58) - (0) - (0) (58)
Exchange
differences 0 (1) (0) (41) (0) 0 (1) (9) (52) -
Balance as of
31 March 2021 44 17 1 936 15 22 27 635 1,697 -
Net carrying
value
As of 1 April
2019 9 39 28 1,451 10 2 15 43 1,597 367
As at 31 March
2020 8 32 25 1,686 16 2 18 45 1,832 259
As at 31 March
2021 6 29 26 1,922 22 2 18 41 2,066 166
(1) Related to the reversal of gross carrying value and
accumulated depreciation on retirement of PPE and reclassification
from one category of asset to another.
(2) Includes PPE amounting to USD 50m and USD 4m as at 31 March
2021 and 2020 respectively, pledged against the Group's
borrowings.
(3) The carrying value of capital work-in-progress as at 31
March 2021 and 2020 mainly pertains to plant and equipment.
10. Impairment review
The carrying amount of goodwill is attributed to the following
groups of CGUs:
As of
----------------------------------------
31 March 2021 31 March 2020
-------------- ------------------------
Nigeria 1,298 1,373
East Africa 1,821 1,853
Rest of Africa 716 717
3,835 3,943
============== ========================
The Group tests goodwill for impairment annually on 31 December.
The carrying value of Goodwill as of 31 December 2020 was USD
1,349m, USD 1,836m and USD 730m for Nigeria, East Africa and
Francophone Africa, respectively. The recoverable amounts of the
above group of CGUs are based on value-in-use, which are determined
based on ten-year business plans that have been approved by the
Board.
The Group operates in emerging markets which are underpenetrated
when compared to developed markets. In such emerging markets,
short-term plans (for example, five years) are not indicative of
the long-term future prospects and performance of the Group.
Considering this, the life of the Group's regulatory licences and
network assets, which are at an average of 10 years, and the
potential opportunities of the emerging African telecom sector,
which is mostly a 2-3 player market with lower smartphone
penetration, the Group has adopted a ten-year plan for the purpose
of internal forecasts and impairment testing. Accordingly, the
Board approved that this planning horizon reflects the assumptions
for medium to long-term market developments, appropriately covers
market dynamics of emerging markets and better reflects the
expected performance in the markets in which the Group
operates.
While using the ten-year plan, the Group also considers external
market data to support the assumptions used in such plans, which is
generally available only for the first five years. Considering the
degree of availability of external market data beyond year five,
the Group has performed sensitivity analysis to assess the impact
on impairment of using a five-year plan. The results of this
sensitivity analysis demonstrate that the initial five-year plan
with appropriate changes including long-term growth rates applied
at the end of this period does not result in any impairment and
does not impact the headroom by more than 6% in any of the group of
CGUs as compared to the headroom using the ten-year plan. In
performing this sensitivity, the Group has changed the long-term
growth rate for Nigeria from 2.51% to 4.51% while retaining the
long-term growth rates for the other group of CGUs. The change in
Nigerian long-term growth rate is aligned to the level of
penetration and growth opportunities in the Nigerian telecom market
towards the expiry of the five-year period and is in line with our
view of combined growth over years six to ten and after ten years.
Further, the Group is confident that projections for years six to
ten are reliable and can demonstrate its ability, based on past
experience, to forecast cash flows accurately over a longer period.
Accordingly, the Board has approved and the Group continues to
follow a consistent policy of using an initial forecast period of
ten years for the purpose of impairment testing.
The cash flows beyond the planning period are extrapolated using
appropriate long-term terminal growth rates. The long-term terminal
growth rates used do not exceed the long-term average growth rates
of the respective industry and country in which the entity operates
and are consistent with internal/external sources of
information.
The input used in performing the impairment assessment at 31
December 2020 were as follows:
Assumptions Nigeria East Africa Francophone Africa
------------------------- --------- ------------ -------------------
Pre-tax Discount Rate 22.45% 14.82% 14.25%
Capital expenditure (1) 8% - 19% 6% - 17% 5% - 10%
Long term growth rate 2.51% 5.11% 3.70%
(1) Capital expenditure is expressed as a percentage of Gross
Revenue over the plan period.
At 31 December 2020, the impairment testing did not result in
any impairment in the carrying amount of goodwill in any group of
CGUs.
The key assumptions in performing the impairment assessment were
as follows:
Assumptions Basis of assumptions
--------------------- -----------------------------------------------------------------------------------------------
Discount rate Discount rate reflects the market assessment of the risks specific to the group of CGUs and
estimated based on the weighted average cost of capital for respective CGUs. Following the
onset of the COVID-19 outbreak, the Group had concluded that in determining the discount rate
at 31 March 2020, using spot country risk premiums would not give a discount rate that a
market
participant would expect at the balance sheet date in determining the present value of cash
flows over a ten-year period. At 31 December 2020 this significant market volatility has
reduced
and management have reverted to using a spot rate.
===================== ===============================================================================================
Capital expenditures The cash flow forecasts of capital expenditure are based on experience after considering the
capital expenditure required to meet coverage and capacity requirements relating to voice,
data and mobile money services.
===================== ===============================================================================================
Growth rates The growth rates used are in line with the long-term average growth rates of the respective
industry and country in which the entity operates and are consistent with the internal /
external
sources of information.
===================== ===============================================================================================
At 31 December 2020, the impairment testing did not result in
any impairment in the carrying amount of goodwill in any group of
CGUs. The results of the impairment tests using these rates show
that the recoverable amount exceeds the carrying amount by USD
1,719m for Nigeria (69%), USD 4,811m for East Africa (155%) and USD
1,811m for Francophone Africa (107%). The Group therefore concluded
that no impairment was required to the Goodwill held against each
group of CGUs.
-- Sensitivity in discount rate and capital expenditure
Management believes that no reasonably possible change in any of
the key assumptions would cause the difference between the carrying
value and recoverable amount for any cash-generating unit to be
materially different from the recoverable value in the base case.
The table below sets out the breakeven pre-tax discount rate for
each group of CGUs, which will result in the recoverable amount
being equal with the carrying amount for each group of CGU's:
Francophone
Nigeria East Africa Africa
---------------------- ------- ----------- -----------
Pre-tax Discount Rate 33.28% 29.04% 26.32%
The table below presents the increase in isolation in capital
expenditure which will result in equating the recoverable amount
with the carrying amount of each group of CGUs:
Assumptions Nigeria East Africa Francophone
Africa
--------------------- -------- ------------ ------------
Capital expenditure 6.81% 13.94% 9.86%
No reasonably possible change in the terminal growth rate would
cause the carrying amount to exceed the recoverable amount.
11. Cash and bank balances
Cash and cash equivalents
As of
--------------------------------------------------
31 March 2021 March 31, 2019
-------------- ----------------------------------
Balances with banks
- On current accounts 486 153
- Bank deposits with original maturity of 3
months or less 290 836
Cheques on hand 0 0
Balance held in wallets 36 20
Cash on hand 1 1
813 1,010
============== ==================================
Other bank balances
As of
------------------------------
31 March 2021 31 March 2020
-------------- --------------
Term deposits with banks 257 -
Margin money deposits (1) 25 6
Unpaid dividend 0 -
282 6
============== ==============
(1) Margin money deposits represents amount given as collateral
for legal cases and/or bank guarantees for disputed matters, and
deposit against derivative contracts.
For the purpose of the statement of cash flows, cash and cash
equivalents are as follows:
As of
-------------------------------------------------
31 March 2021 31 March 2020
-------------- ---------------------------------
Cash and cash equivalents as per balance sheet 813 1,010
Balance held under mobile money trust 440 295
Bank overdraft (251) (218)
Cash and cash equivalents classified as held for sale 1 -
(refer note 17)
1,003 1,087
============== =================================
12. Borrowings
Non-current
As of
--------------------------------------------------
31 March 2021 31 March 2020
-------------- ----------------------------------
Secured
Term loans 50 0
Less: Current portion (A) (50) (0)
- 0
-------------- ----------------------------------
Unsecured
Term loans 544 522
Non- convertible bonds (1) 2,403 2,353
2,947 2,875
-------------- ----------------------------------
Less: Current portion (B) (1,076) (429)
1,871 2,446
-------------- ----------------------------------
1,871 2,446
============== ==================================
Current maturities of long-term borrowings (A + B) 1,126 429
C urrent
As of
31 March 2021 31 March 2020
-------------- ---------------------------------
Secured
Term Loans - 0
Bank overdraft - 4
- 4
-------------- ---------------------------------
Unsecured
Term loans 92 17
Bank overdraft 250 214
342 231
-------------- ---------------------------------
342 235
============== =================================
(1) It includes impact of fair value hedges and debt origination
costs. During the year ended 31 March 2020, the Group repaid
non-convertible bonds of CHF 350m at maturity.
13. Share capital
As of
------------------------------
31 March 2021 31 March 2020
-------------- --------------
Authorised shares
3,758,151,504 Ordinary shares of USD 0.5 each
(March 2020: 3,758,151,504) 1,879 1,879
3,081,744,577 Deferred shares of USD 0.5 each
(March 2020:3,081,744,577) 1,541 1,541
--------------
3,420 3,420
============== ==============
Issued, Subscribed and fully paid-up shares
3,758,151,504 Ordinary shares of USD 0.5 each (March 2020: 3,758,151,504) (1) (2) 1,879 1,879
3,081,744,577 Deferred shares of USD 0.5 each (1)
(March 2020: 3,081,744,577) 1,541 1,541
--------------
3,420 3,420
============== ==============
(1) On 27 June 2019, the company sub-divided and converted each ordinary share of USD 1 into:
-- One ordinary share of USD 0.5 each having the same rights and
being subject to the same restrictions as the existing ordinary
shares of the company; and
-- One deferred share of USD 0.5 each.
(2) On 3 July 2019 and 9 July 2019, the company completed its
listing on the London Stock Exchange (LSE) and Nigerian Stock
Exchange (NSE) respectively and raised USD 680m (including share
premium of USD 342m) from the issue of 676,406,927 new ordinary
shares.
(3) During the year 31 March 2020, in order to meet the share
capital requirements for re-registration as a public limited
company, the company allotted 50,000 redeemable deferred shares of
GBP 1 each (the 'Redeemable Deferred Shares') to AAML. In
accordance with approval of High Court in London on 22 October
2019, these shares were reduced to Nil and the amount was paid to
the shareholder.
14. Contingent liabilities and commitments
(i) Contingent liabilities
As of
----------------------------------------------
31 March 2021 31 March 2020
-------------- ------------------------------
(i) Taxes, Duties and Other demands (under adjudication / appeal /
dispute)
-Income tax 23 30
- Value added tax 30 56
-Customs duty & Excise duty 8 7
-Other miscellaneous demands 9 13
(ii) Claims under legal and regulatory cases including arbitration
matters 87 83
-------------- ------------------------------
157 189
============== ==============================
There are uncertainties in the legal, regulatory and tax
environments in the countries in which the Group operates and there
is a risk of demands, which may be raised based on current or past
business operations. Such demands have in past been challenged and
contested on merits with appropriate authorities and appropriate
settlements agreed. Other than amounts provided where the Group
believes there is a probable settlement and contingent liabilities
where the Group has assessed the additional possible amounts, there
are no other legal, tax or regulatory obligations which may be
expected to be material to the financial statements.
The movement in contingent liabilities during the year ended 31
March 2021 of USD 32m primarily comprises of reduction in a Value
added tax (VAT) and withholding tax assessment received by one of
the subsidiaries of the Group amounting to USD 23m.
One of the subsidiaries of the Group is involved in a dispute
with one of its distributors, with respect to alleged unpaid
commissions, bonuses and benefits, totalling approximately USD 12m,
over a period of around eleven years of its business relationship
with the subsidiary. In March 2012, the distributor filed a claim
against the subsidiary in the High Court. On 4 October 2016, the
High Court ruled against the subsidiary and ordered to pay the
claimed amount of approximately USD 12m to the distributor. On 5
October 2016, the subsidiary filed an appeal in the Court of Appeal
against the order of the High Court, which on 24 July 2020 was
ruled against the subsidiary. On 7 August 2020, the subsidiary
filed an appeal against the decision of the Court of Appeal, in the
Supreme Court. Record of appeal has been transmitted to the Supreme
Court and briefs of argument are currently being prepared.
Despite the strength of the subsidiary's line of defence, as
both the High Court and Court of Appeal have ruled against the
subsidiary, it is appropriate to disclose this matter as contingent
liability for USD 12m, pending the decision of the Supreme Court.
No provision has been made against the said claim.
Guarantees:
Guarantees outstanding as of 31 March 2021 and 31 March 2020
amounting to USD 12m and USD 10m respectively have been issued by
banks and financial institutions on behalf of the Group. These
guarantees include certain financial bank guarantees which have
been given for sub judice matters, the amounts with respect to
these have been disclosed under capital commitments, contingencies
and liabilities, as applicable, in compliance with the applicable
accounting standards.
(ii) Commitments
Capital Commitments
The Group has contractual commitments towards capital
expenditure (net of related advances paid) of $232m and $234m as of
31 March 2021 and 31 March 2020 respectively.
15. Related Party disclosure
(a) List of related parties
i. Parent company
Airtel Africa Mauritius Limited
ii. Intermediate parent entity
Network i2i Limited
Bharti Airtel Limited
Bharti Telecom Limited
iii. Ultimate controlling entity
Bharti Enterprises (Holding) Private Limited. It is held by
private trusts of Bharti family, with Mr. Sunil Bharti Mittal's
family trust effectively controlling the company.
iv. Associate
Seychelles Cable Systems Company Limited
v. Other entities with whom transactions have taken place during the reporting period
a. Fellow subsidiaries
Bharti Airtel International (Mauritius) Limited
Nxtra Data Limited
Bharti Airtel Services Limited
Bharti International (Singapore) Pte Ltd
Bharti Airtel (UK) Limited
Bharti Airtel (USA) Limited
Bharti Airtel (France) SAS
Bharti Airtel Lanka (Private) Limited
Bharti Hexacom Limited
b. Other related parties
Airtel Ghana Limited
Singapore Telecommunication Limited
vi. Key Management Personnel ('KMP')
a. Executive director
Raghunath Venkateswarlu Mandava
b. Non-executive directors
Sunil Bharti Mittal
Awuneba Ajumogobia (since April 2019)
Douglas Baillie (since April 2019)
John Danilovich (since April 2019)
Andrew Green (since April 2019)
Akhil Gupta
Shravin Bharti Mittal
Annika Poutiainen (since April 2019)
Ravi Rajagopal (since April 2019)
Arthur Lang (till October 2020)
Kelly Bayer Rosmarin (since October 2020)
c. Others
Segun Ogunsanya
Ian Ferrao (since September 2019)
Michael Foley (since February 2020)
Jaideep Paul
Razvan Ungureanu
Luc Serviant (since December 2019)
Daddy Mukadi
Neelesh Singh
Ramakrishna Lella
Olivier Pognon
Rogany Ramiah (since May 2019)
Stephen Nthenge (since May 2019)
Vimal Kumar Ambat (since February 2021)
Ashish Malhotra (since October 2020)
Vinny Puri (since March 2021)
In the ordinary course of business, there are certain
transactions among the Group entities and all these transactions
are on arm's length basis. However, the intra-Group transactions
and balances, and the income and expenses arising from such
transactions, are eliminated on consolidation. The transactions
with remaining related parties for the years ended 31 March 2021
and 2020 respectively, are described below:
The summary of transactions with the above-mentioned parties is
as follows:
For the year ended
----------------------------------------------------------------------------------------------------------------------------
31 March 2021 31 March 2020
------------------------------------------------------------- -------------------------------------------------------------
Relationship Parent Intermediate Fellow Associates Other Parent Intermediate Fellow Associates Other
company parent subsidiaries related company parent subsidiaries related
entity parties entity parties
-------- ------------- ------------- ----------- -------- -------- ------------- ------------- ----------- --------
Sale /
rendering
of services - 6 66 - 1 - 8 84 - 0
Purchase /
receiving
of services - 17 52 1 0 - 26 64 1 0
Rent and
other
charges - 1 - - - - 1 - - -
Guarantee and
collateral
fee paid - 10 - - - - 11 - - -
Purchase of
assets - 0 0 - - - - 9 - -
Dividend paid 95 - - - - 63 - - - -
The outstanding balance of the above-mentioned related parties
are as follows:
Relationship Parent company Intermediate Fellow subsidiaries Associate Other related
parent entity parties
---------------- ------------------- -------------------- ---------- -------------------
As of 31 March 2021
Trade payables - 9 29 1 2
Trade receivables - 3 37 - 3
Corporate guarantee fee - 2 - - -
payable
Guarantees and - 7,056 - - -
collaterals taken
(including performance
guarantees)
As of 31 March 2020
Trade payables - 20 32 0 1
Trade receivables - 3 24 - 1
Corporate guarantee fee - 4 - - -
payable
Guarantees and - 7,056 - - -
collaterals taken
(including performance
guarantees)
Key management compensation
KMP are those persons having authority and responsibility for
planning, directing and controlling the activities of the Group,
directly or indirectly, including any director, whether executive
or otherwise. For the Group, these include executive committee
members. Remuneration to key management personnel were as
follows:
For the year ended
-------------------------------------------
31 March 2021 31 March 2020
-------------- ---------------------------
Short-term employee benefits 8 7
Performance linked incentive 3 2
Share-based payment 1 0
Other long-term benefits 4 2
Other benefits 1 2
17 13
============== ===========================
16. Fair Value of financial assets and liabilities
The category wise details as to the carrying value, fair value
and the level of fair value measurement hierarchy of the Group's
financial instruments are as follows:
Carrying value as of Fair value as of
--------------------------------------------- ---------------------------------------------
31 31 March 2020 31 31 March 2020
March March
2021 2021
-------- ----------------------------------- -------- -----------------------------------
Financial
assets
FVTPL
Derivatives
- Forward
and option
contracts Level 2 12 9 12 9
- Currency
swaps and
interest
rate swaps Level 2 0 2 0 2
- Cross
currency
swaps Level 3 1 - 1 -
Investments Level 2 0 0 0 0
Amortised
cost
Security deposits 8 7 8 7
Trade receivables 113 132 113 132
Cash and cash
equivalents 813 1,010 813 1,010
Other bank balances 282 6 282 6
Balance held under
mobile money trust 440 295 440 295
Other financial assets 75 67 75 67
1,744 1,528 1,744 1,528
======== =================================== ======== ===================================
Financial
liabilities
FVTPL
Derivatives
- Forward
and option
contracts Level 2 6 4 6 4
- Currency
swaps and
interest
rate swaps Level 2 2 0 2 0
- Cross
currency
swaps Level 3 3 3
- Embedded
derivatives Level 2 1 3 1 3
Amortised
cost
Borrowings -
fixed rate Level 1 2,403 2,353 2,479 2,274
Borrowings -
fixed rate Level 2 100 48 98 48
Borrowings - floating
rate 836 710 836 710
Trade payables 367 416 367 416
Mobile money wallet
balance 432 292 432 292
Other financial
liabilities 539 476 539 476
4,689 4,302 4,763 4,223
======== =================================== ======== ===================================
The following methods/assumptions were used to estimate the fair
values:
-- The carrying value of bank deposits, trade receivables, trade
payables, short-term borrowings, other current financial assets and
liabilities approximate their fair value mainly due to the
short-term maturities of these instruments.
-- Fair value of quoted financial instruments is based on quoted
market price at the reporting date.
-- The fair value of non-current financial assets, long-term
borrowings and other financial liabilities is estimated by
discounting future cash flows using current rates applicable to
instruments with similar terms, currency, credit risk and remaining
maturities.
-- The fair values of derivatives are estimated by using pricing
models, wherein the inputs to those models are based on readily
observable market parameters. The valuation models used by the
Group reflect the contractual terms of the derivatives (including
the period to maturity), and market-based parameters such as
interest rates, foreign exchange rates, volatility etc. These
models do not contain a high level of subjectivity as the valuation
techniques used do not require significant judgement and inputs
thereto are readily observable.
During the year ended 31 March 2021 and year ended 31 March 2020
there were no transfers between Level 1 and Level 2 fair value
measurements, and no transfer into and out of Level 3 fair value
measurements.
The following table describes the key inputs used in the
valuation (basis discounted cash flow technique) of the Level 2
financial assets/liabilities as of 31 March 2021 and 31 March
2020:
Financial assets / liabilities Inputs used
-------------------------------------------------- ------------------------------------------------
- Currency swaps, forward and option contracts Forward foreign currency exchange rates, Interest rate
- Interest rate swaps Prevailing / forward interest rates in market, Interest
rate
- Embedded derivatives Prevailing interest rates in market, inflation rates
- Other financial assets / fixed rate borrowing / other Prevailing interest rates in market, Future payouts,
financial Interest rates
liabilities
17. Assets and Liabilities held for sale
As described under Note 4(f), assets and liabilities of disposal
groups held for sale at 31 March 2021 relate to our
telecommunication tower subsidiary in Madagascar (part of
Francophone Africa segment) and 162 towers and related liabilities
in Rwanda (part of East Africa segment). The disposals do not meet
the definition of a discontinued operation per IFRS 5.
For these disposals, the Group has agreed a selling price with
the prospective purchaser which is used as the fair value for the
impairment test and the same is classified as Level 3 on the fair
value hierarchy. The disposals are expected to result in profits
and therefore no impairment has been recognized on classification
as held for sale.
The disposal groups were stated at their carrying values and
comprised the following assets and liabilities:
As of
31 March 2021 31 March 2020
------------- -------------
Assets of disposal group classified as held for sale
Property, plant and equipment 19 -
Capital work-in-progress 0 -
Right of use assets 5 -
Income tax assets 0 -
Deferred tax assets 2 -
Trade receivables 0 -
Cash and cash equivalents 1 -
Loans and security deposits 0 -
Other current assets 4 -
------------- -------------
31 -
============= =============
Liabilities of disposal group classified as held for sale
Lease liabilities 7 -
Provisions 1 -
Deferred tax liabilities (net) 1 -
Trade payables 2 -
Other current liabilities 8 -
------------- -------------
19 -
============= =============
The cumulative other comprehensive loss relating to the disposal
group classified as held for sale is USD 4m.
18. Events after the balance sheet date
No subsequent events or transactions have occurred since the
date of statement of financial position or are pending that would
have material effect on the financial statements as at and for the
year ended 31 March 2021 except as follows:
-- On 20 April 2021, the Group has entered into an inaugural
multi-bank long-term facility amounting to $500m.
-- The Board recommended a final dividend of 2.5 cents per share on 11 May 2021.
Appendix
Additional information pertaining to three months ended March
31, 2021
Consolidated Statement of Comprehensive Income (unaudited)
(All amounts are in US dollar millions, unless otherwise
stated)
For three months ended
---------------------------------------------------
31 March 2021 31 March 2020
-------------- -----------------------------------
Income
Revenue 1,038 899
Other income 1 3
1,039 902
Expenses
Network operating expenses 183 168
Access charges 97 94
License fee / spectrum usage charges 53 51
Employee benefits expense 67 62
Sales and marketing expenses 50 46
Impairment loss / (reversal) on financial assets (1) (1)
Other expenses 97 86
Depreciation and amortisation 174 152
720 658
Operating profit 319 244
Finance costs 106 159
Finance income (2) (12)
Share of profit for associate (0) (0)
Profit before tax 215 97
Tax expense 61 20
Profit for the period 154 77
Profit before tax (as presented above) 215 97
Less: Exceptional items (net) (1) -
Underlying profit before tax 214 97
Profit after tax (as presented above) 154 77
Less: Exceptional items (net) (22) (7)
Underlying profit after tax 132 70
Other comprehensive income ('OCI')
Items to be reclassified subsequently to profit or loss:
Net losses due to foreign currency translation
differences (94) (186)
Net loss on net investments hedge 9 2
Net gain on cash flow hedge - (2)
(85) (186)
Items not to be reclassified subsequently to profit or loss:
Re-measurement loss on defined benefit plans (0) (0)
Tax credit on above - (0)
(0) (0)
Other comprehensive loss for the period (85) (186)
For three months ended
---------------------------------------------------
31 March 2021 31 March 2020
-------------- -----------------------------------
Total comprehensive income/(loss) for the period 69 (109)
Profit for the period attributable to: 154 77
Owners of the Company 132 65
Non-controlling interests 22 12
Other comprehensive loss for the period attributable to: (85) (186)
Owners of the Company (80) (183)
Non-controlling interests (5) (3)
Total comprehensive income/(loss) for the period attributable
to: 69 (109)
Owners of the Company 52 (118)
Non-controlling interests 17 9
Alternative performance measures (APMs)
Introduction
In the reporting of financial information, the directors have
adopted various APMs. These measures are not defined by
International Financial Reporting Standards (IFRS) and therefore
may not be directly comparable with other companies APMs, including
those in the Group's industry.
APMs should be considered in addition to, and are not intended
to be a substitute for, or superior to, IFRS measurements.
Purpose
The directors believe that these APMs assist in providing
additional useful information on the underlying trends, performance
and position of the Group.
APMs are also used to enhance the comparability of information
between reporting periods and geographical units (such as
like-for-like sales), by adjusting for non-recurring or
uncontrollable factors which affect IFRS measures, to aid users in
understanding the Group's performance. Consequently, APMs are used
by the directors and management for performance analysis, planning,
reporting and incentive-setting purposes.
The directors believe the following metrics to be the APMs used
by the Group to help evaluate growth trends, establish budgets and
assess operational performance and efficiencies. These measures
provide an enhanced understanding of the Group's results and
related trends, therefore increasing transparency and clarity into
the core results of the business.
The following metrics are useful in evaluating the Group's
operating performance:
APM Closest Adjustment to reconcile to IFRS measure Table Definition and
equivalent reference purpose
IFRS measure (1)
Underlying Revenue Table A The Group
revenue * Exceptional items defines
underlying
revenue as
revenue for the
period adjusted
for exceptional
items.
The directors
view underlying
revenue to be a
meaningful
measure to
analyse the
Group's revenue,
excluding
exception items.
Exceptional
items are
additional
specific items
that because of
their size,
nature or
incidence
in the results,
are considered
to hinder
comparison of
the Group's
performance on a
period-to-period
basis and could
distort the
understanding of
our performance
for the period
and the
comparability
between periods
and hence are
adjusted to
arrive at
underlying
revenue.
Underlying Operating Table B The Group
EBITDA and profit * Depreciation and amortisation defines
margin underlying
EBITDA as
* Charity and donation operating
profit/ (loss)
for the period
* Exceptional items before
depreciation
and
amortization,
charity and
donation and
adjusted for
exceptional
items.
Group defines
underlying
EBITDA margin as
underlying
EBITDA divided
by total
underlying
revenue.
Underlying
EBITDA and
margin are
measures used by
the directors to
assess the
trading
performance
of the business
and are
therefore the
measure of
segment profit
that the Group
presents under
IFRS. Underlying
EBITDA and
margin are also
presented on a
consolidated
basis because
the
directors
believe it is
important to
consider
profitability on
a basis
consistent with
that
of the Group's
operating
segments. When
presented on a
consolidated
basis,
underlying
EBITDA
and margin are
APM.
Depreciation and
amortisation is
a non-cash item
which fluctuates
depending on the
timing
of capital
investment and
useful economic
life. Directors
believe that a
measure which
removes
this volatility
improves
comparability of
the Group's
results period
on period and
hence is
adjusted to
arrive at
underlying
EBITDA and
margin.
Charity and
donations are
not related to
the trading
performance of
the Group and
hence adjusted
to arrive at
underlying
EBITDA and
margin.
Exceptional
items are
additional
specific items
that because of
their size,
nature or
incidence
in the results,
are considered
to hinder
comparison of
the Group's
performance on a
period-to-period
basis and could
distort the
understanding of
our performance
for the period
and the
comparability
between periods
and hence are
adjusted to
arrive at
underlying
EBITDA and
margin.
Underlying Profit / Table C The Group
profit / (loss) before * Exceptional items defines
(loss) before tax underlying
tax profit / (loss)
before tax as
profit/ (loss)
before tax
adjusted
for exceptional
items.
The directors
view underlying
profit / (loss)
before tax to be
a meaningful
measure to
analyse
the Group's
profitability.
Exceptional
items are
additional
specific items
that because of
their size,
nature or
incidence
in the results,
are considered
to hinder
comparison of
the Group's
performance on a
period-to-period
basis and could
distort the
understanding of
our performance
for the period
and the
comparability
between periods
and hence are
adjusted to
arrive at
underlying
profit / (loss)
before tax.
Effective tax Reported tax Table D The Group
rate rate * Exceptional items defines
effective tax
rate as reported
* Foreign exchange rate movements tax rate
(reported tax
charge divided
* One-off tax impact of prior period, tax litigation by
settlement and impact of tax on permanent differences reported profit
before tax)
adjusted for
exceptional
items, foreign
exchange rate
movements
and one-off tax
items of prior
year adjustment,
tax settlements
and impact of
permanent
differences
on tax.
This provides an
indication of
the current
on-going tax
rate across the
Group.
Exceptional
items are
additional
specific items
that because of
their size,
nature or
incidence
in the results,
are considered
to hinder
comparison of
the Group's
performance on a
period-to-period
basis and could
distort the
understanding of
our performance
for the period
and the
comparability
between periods
and hence are
adjusted to
arrive at
effective tax
rate.
Foreign exchange
rate movements
are specific
items that are
non-tax
deductible in
few of the
entities which
are loss making
and where DTA is
not yet
triggered and
hence are
considered
to hinder
comparison of
the Group's
effective tax
rate on a
period-to-period
basis and
therefore
excluded to
arrive at
effective tax
rate.
One-off tax
impact on
account of prior
year adjustment,
any tax
litigation
settlement and
tax impact on
permanent
differences are
additional
specific items
that because of
their size
and frequency in
the results, are
considered to
hinder
comparison of
the Group's
effective
tax rate on a
period-to-period
basis.
Adjusted Reported tax Table D The Group
effective tax rate * Deferred tax triggered during the year and accounted defines adjusted
rate as exceptional tax item. effective tax
rate as
effective tax
rate after
normalizing any
impact arising
on account of
deferred tax
triggered during
the year for the
first time which
has been
reported as
exceptional
item.
This provides an
indication of
the tax rate
across the Group
for the current
financial year
after
considering any
deferred tax
triggered during
the year.
Underlying Profit/(loss) Table E The Group
profit/(loss) for the * Exceptional items defines
after tax period underlying
profit / (loss)
after tax as
profit / (loss)
for the period
adjusted
for exceptional
items.
The directors
view underlying
profit / (loss)
after tax to be
a meaningful
measure to
analyse
the Group's
profitability.
Exceptional
items are
additional
specific items
that because of
their size,
nature or
incidence
in the results,
are considered
to hinder
comparison of
the Group's
performance on a
period-to-period
basis and could
distort the
understanding of
our performance
for the period
and the
comparability
between periods
and hence are
adjusted to
arrive at
underlying
profit/(loss)
after tax.
Earnings per EPS Table F The Group
share before * Exceptional items defines earnings
exceptional per share before
items exceptional
items as profit/
(loss) for the
period
before
exceptional
items
attributable to
owners of the
company divided
by the weighted
average
number of
ordinary shares
in issue during
the financial
period.
This measure
reflects the
earnings per
share before
exceptional
items for each
share unit
of the company.
Exceptional
items are
additional
specific items
that because of
their size,
nature or
incidence
in the results,
are considered
to hinder
comparison of
the Group's
performance on a
period-to-period
basis and could
distort the
understanding of
our performance
for the period
and the
comparability
between periods
and hence are
adjusted to
arrive at
earnings for the
purpose of
earnings per
share before
exceptional
items.
Operating Cash Table H The Group
free cash generated * Income tax paid, defines
flow from operating free
operating cash flow as net
activities * Changes in working capital, cash generated
from operating
activities
* Other non-cash items, before income
tax paid,
changes in
* Non-operating income, working capital,
other non-cash
items,
* Charity and donation non-operating
income,
charity and
* Exceptional items donation and
exceptional
items less
* Capital expenditures capital
expenditures.
The Group views
operating
free cash flow
as a key
liquidity
measure, as it
indicates the
cash available
to pay
dividends,
repay debt or
make further
investments in
the Group.
Free cash Cash Table I The Group
flow generated * Changes in working capital, defines free
from cash flow as net
operating cash generated
activities * Capital expenditures from operating
activities after
change
* Income tax paid in operating
working capital,
income tax paid
* Cash interest & cash interest.
It is calculated
as "Underlying
EBITDA less
change in
operating
working capital,
capital
expenditure,
income tax paid
and
cash interest."
The Group views
free cash flow
as a key
liquidity
measure, as it
indicates the
cash available
to pay
dividends, repay
debt or make
further
investments in
the Group.
Net debt and No direct Table J The Group
leverage equivalent * Borrowing defines net debt
ratio as borrowings
including lease
* Lease liabilities liabilities less
cash and cash
equivalents,
* Cash and cash equivalent term deposits
with banks,
processing costs
* Term deposits with banks related to
borrowings and
fair value hedge
* Fair value hedges adjustments.
The Group
defines leverage
ratio as net
debt divided by
underlying
EBITDA.
The directors
view net debt
and the leverage
ratio to be
meaningful
measures to
monitor the
Group's ability
to cover its
debt through its
earnings.
Return on No direct Table K Group defines
capital equivalent * Exceptional items to arrive at underlying EBIT return on
employed capital employed
('ROCE') as
underlying EBIT
divided by
average capital
employed.
The directors
view return on
capital employed
as a financial
ratio that
measures Group's
profitability
and the
efficiency with
which its
capital is being
utilised.
The Group
defines
underlying EBIT
as operating
profit/ (loss)
for the period
adjusted for
exceptional
items.
Exceptional
items are
additional
specific items
that because of
their size,
nature or
incidence
in the results,
are considered
to hinder
comparison of
the Group's
performance on a
period
to period basis
and could
distort the
understanding of
our performance
for the period
and
the
comparability
between periods
and hence are
adjusted to
arrive at
Underlying EBIT.
Capital employed
is defined as
sum of equity
attributable to
owners of the
company,
non-controlling
interests and
net debt.
Average capital
employed is
average of
capital employed
at the closing
and beginning of
the relevant
period.
(1) Refer "Reconciliation between GAAP and alternative
performance measures" for respective table.
Some of the Group's IFRS measures and APMs are translated at
constant currency exchange rates to measure organic performance of
the Group. In determining the percentage change in constant
currency terms, both current and previous financial reporting
period's results have been converted using exchange rates
prevailing as on 31 March 2020. Reported currency percentage change
is derived on the basis of average actual periodic exchange rates
for that financial period. Variance between constant currency and
reported currency percentage are due to exchange rate movements
between previous financial reporting period and current period.
Changes to APMs
Definition of underlying EBITDA margin has been clarified as
underlying EBITDA divided by underlying revenue. Underlying revenue
is included in the APM and is defined as revenue for the period
adjusted for exceptional items. The reason for using underlying
revenue is because exceptional revenue has been recorded for the
first time in the Year ended 31 March 2021. Return on capital
employed has been included in the APM and is defined as Underlying
EBIT divided by average capital employed. ROCE is a financial ratio
that measures Group's profitability and efficiency with which its
capital is being utilised.
Reconciliation between GAAP and Alternative Performance
Measures
Table A: Underlying revenue
Description Unit Year ended
of measure
March 2021 March 2020
Revenue $m 3,908 3,422
Less:
Exceptional items $m (20) -
Underlying revenue $m 3,888 3,422
Table B: Underlying EBITDA and margin
Description Unit Year ended
of measure
March 2021 March 2020
Operating profit $m 1,119 901
Add:
Depreciation and amortisation $m 681 632
Charity and donation $m 6 5
Exceptional items $m (14) (23)
Underlying EBITDA $m 1,792 1,515
Underlying revenue $m 3,888 3,422
Underlying EBITDA margin (%) % 46.1% 44.3%
Table C: Underlying profit / (loss) before tax
Description Unit Year ended
of measure
March 2021 March 2020
Profit / (loss) before tax $m 697 598
Exceptional items (net) $m (14) (65)
Underlying profit / (loss)
before tax $m 683 533
Table D: Effective tax rate and adjusted effective tax rate
Description Unit Year ended
of measure
March 2021 March 2020
Profit Income Tax rate Profit Income Tax rate
before tax expense % before tax expense %
taxation taxation
Reported effective tax
rate $m 697 282 40.5% 598 190 31.8%
Adjusted for:
Exceptional items (provided
below) $m (14) 36 (65) 47
Foreign exchange rate
movements for non-DTA
OpCos & HoldCos $m 42 (21)
One-off tax adjustment $m (5) 12
Effective tax rate $m 725 313 43.2% 512 249 48.6%
Deferred tax triggered
during the year $m (36) (51)
Adjusted effective tax
rate $m 725 277 38.2% 512 198 38.7%
Exceptional items
1. Deferred tax asset
recognition $m 36 51
2. Network modernisation $m 27 2
3. Employee restructuring $m 6
4. Service revenues $m (20)
5. Reversal of indemnities $m (72)
6. Share issue and IPO
related expenses $m 6
7. Finance cost $m 1
8. Customer acquisition
cost $m (27) (6)
Total $m (14) 36 (65) 47
Table E: Underlying profit / (loss) after tax
Description Unit Year ended
of measure
March 2021 March 2020
Profit / (loss) after tax $m 415 408
Exceptional items $m (50) (112)
Underlying profit / (loss) after
tax $m 365 296
Table F: Earnings per share before exceptional items
Description Unit Year ended
of measure
March 2021 March 2020
Profit / (loss) after tax before
exceptional items attributable
to owners of the company (refer
Table G) $m 308 261
Weighted average number of ordinary
shares in issue during the financial
period. million 3,758 3,586
Earnings per share before exceptional
items Cents 8.2 7.3
Table G: Earnings per share -Restated
Description Unit of Year ended
measure
March 2021 March 2020
Weighted average shares million 3,758 3,586
Weighted average shares - Restated million 3,754 3,754
Profit for the period attributable
to owners of the company $m 339 370
Operating and non-operating
exceptional items $m (14) (65)
Tax exceptional items $m (36) (47)
Non-controlling interest exceptional
item $m 19 3
Profit attributable to owners of
the company - pre-exceptional items $m 308 261
Basic EPS cents 9.0 10.3
EPS before exceptional items cents 8.2 7.3
Basic EPS -restated (1) cents 9.0 9.8
EPS before exceptional items -restated
(1) cents 8.2 6.9
(1) EPS has been restated to reflect the position if all the
shares as of 31 March 2021 been issued on 1 April
2019, for a like-for-like comparison.
Table H: Operating free cash flow
Description Unit of Year ended
measure
March 2021 March 2020
Net cash generated from operating
activities $m 1,666 1,387
Add: Income tax paid $m 195 114
Net cash generation from operation
before tax $m 1,861 1,501
Less: Changes in working capital
Increase in trade receivables $m 8 11
Increase in inventories $m 4 1
Decrease in trade payables $m 38 15
Increase in mobile money wallet
balance $m (139) (53)
Increase in provisions $m (1) (2)
Increase in deferred revenue $m (17) (20)
Decrease in income received
in advance $m 1 11
Increase in other financial
and non-financial liabilities $m (18) (4)
Increase in other financial
and non-financial assets $m 48 28
Operating cash flow before changes
in working capital $m 1,785 1,488
Other non-cash adjustments $m 15 45
Charity and donation $m 6 5
Exceptional items $m (14) (23)
Underlying EBITDA $m 1,792 1,515
Less: Capital expenditure $m (614) (642)
Operating free cash flow $m 1,178 873
Table I: Free cash flow
Description Unit of Year ended
measure
March 2021 March 2020
Underlying EBITDA $m 1,792 1,515
Less: Capital expenditure $m (614) (642)
Operating free cash flow $m 1,178 873
Add: Changes in working capital
Increase in trade receivables $m (8) (11)
Increase in inventories $m (4) (1)
Decrease in trade payables $m (38) (15)
Decrease in income received in
advance $m (1) (11)
Increase in deferred revenue $m 17 20
Operating cash flow after changes
in working capital $m 1,144 855
Less: Income tax paid $m (195) (114)
Less: Cash interest (net) $m (302) (288)
Free cash flow $m 647 453
Table J: Net debt and leverage
Description Unit of As at As at
measure
March 2021 March 2020
Long term borrowing, net of current
portion $m 1,871 2,446
Short-term borrowings and current
portion of long-term borrowing $m 1,468 664
Add: Processing costs related to
borrowings $m 5 5
Add/(less): Fair value hedge adjustment $m (21) (27)
Less: Cash and cash equivalents $m (813) (1,010)
Less: Term deposits with banks $m (257) -
Net debt excluding Lease liabilities $m 2,253 2,078
Add: Lease liabilities $m 1,277 1,169
Net debt including Lease liabilities $m 3,530 3,247
Underlying EBITDA (LTM) $m 1,792 1,515
Leverage (LTM) times 2.0 2.1
Table K: Return on capital employed
Description Unit of Year ended
measure
March 2021 March 2020
Operating profit $m 1,119 901
Less:
Exceptional items $m (14) 4
Underlying EBIT $m 1,105 905
Equity attributable to owners of
the company $m 3,405 3,388
Non-controlling interests (NCI) $m (52) (107)
Net debt (refer Table J) $m 3,530 3,247
Capital employed $m 6,883 6,528
Average capital employed (1) $m 6,705 6,481
Return on capital employed % 16.5% 14.0%
(1) Capital employed at the beginning of year ended 31 March
2021 and 2020 is $6,528m and $6,435m respectively.
Glossary
Technical and Industry Terms
4G data customer A customer having a 4G handset and who has used at least
1MB on any of the Group's GPRS, 3G
& 4G network in the last 30 days.
Airtel Money Airtel Money is the brand name for Airtel Africa's mobile
money products and services. The
term is used interchangeably with "mobile money" when
referring to our mobile money business,
finance, operations and activities.
Airtel Money ARPU Mobile money average revenue per user. This is derived by
(mobile money ARPU) dividing total mobile money revenue
during the relevant period by the average number of
active mobile money customers and dividing
the result by the number of months in the relevant
period.
Airtel Money customer base (mobile money customer base) Total number of active subscribers who have enacted any
mobile money usage event in last 30
days.
Airtel money customer penetration (mobile money customer The proportion of total Airtel Africa active mobile
penetration) customers who use mobile money services.
Calculated by dividing the mobile money customer base by
the Group's total customer base.
Airtel Money transaction value (mobile money transaction Any financial transaction performed on Airtel Africa's
value) mobile money platform.
Airtel money transaction value per customer per month Calculated by dividing the total mobile money transaction
(mobile money transaction value per value on the Group's mobile money
customer per month) platform during the relevant period by the average number
of active mobile money customers
and dividing the result by the number of months in the
relevant period.
ARPU Average revenue per user per month. This is derived by
dividing total revenue during the relevant
period by the average number of customers during the
period and dividing the result by the
number of months in the relevant period.
Average customers The average number of active customers for a period.
Derived from the monthly averages during
the relevant period. Monthly averages are calculated
using the number of active customers
at the beginning and the end of each month.
Broadband base stations Base stations that carry either 3G and/or 4G capability
across all technologies and spectrum
bands.
Capital expenditure An alternative performance measure (non-GAAP). Defined as
investment in gross fixed assets
(both tangible and intangible but excluding spectrum and
licences) plus capital work in progress
(CWIP), excluding provisions on CWIP for the period.
Constant currency The Group has presented certain financial information
that is calculated by translating the
results for the current financial year and previous
financial years at a fixed 'constant currency'
exchange rate, which is done to measure the organic
performance of the Group. Growth rates
for business and product segments are in constant
currency as it better represent the underlying
performance of the business. Constant currency growth for
prior years are calculated using
closing exchange rates as at the end of prior year.
Churn Churn is derived by dividing the total number of customer
disconnections during the relevant
period by the average number of customers and dividing
the result by number of months in the
relevant period.
Customer Defined as a unique active subscriber with a unique
mobile telephone number who has used any
of Airtel's services in the last 30 days.
Customer base The total number of active subscribers that have used any
of our services (voice calls, SMS,
data usage or mobile money transaction) in the last 30
days.
Data ARPU Data ARPU is derived by dividing total data revenue
during the relevant period by the average
number of data customers and dividing the result by the
number of months in the relevant period.
Data customer base The total number of subscribers who have consumed at
least 1MB on the Group's GPRS, 3G or
4G network in the last 30 days.
Data customer penetration The proportion of customers using data services.
Calculated by dividing the data customer
base by the total customer base.
Data usage per customer Calculated by dividing the total MBs consumed on the
Group's network during the relevant period
by the average data customer base over the same period
and dividing the result by the number
of months in the relevant period.
Diluted earnings per share Diluted EPS is calculated by adjusting the profit for the
year attributable to the shareholders
and the weighted average number of shares considered for
deriving basic EPS, for the effects
of all the shares that could have been issued upon
conversion of all dilutive potential shares.
The dilutive potential shares are adjusted for the
proceeds receivable had the shares actually
been issued at fair value. Further, the dilutive
potential shares are deemed converted as
at beginning of the period, unless issued at a later date
during the period.
Earnings per share (EPS) EPS is calculated by dividing the profit for the period
attributable to the owners of the
company by the weighted average number of ordinary shares
outstanding during the period.
Foreign exchange rate movements for non-DTA operating Foreign exchange rate movements are specific items that
companies are non-tax deductible in a few of
and holding companies our operating entities, hence these hinder a
like-for-like comparison of the Group's effective
tax rate on a period-to-period basis and are therefore
excluded when calculating the effective
tax rate.
Free cash flow An alternative performance measure (non-GAAP). Free cash
flow is defined as operating free
cash flow less cash interest, income tax paid and change
in operating working capital.
Information and communication technologies (ICT) ICT refers to all communication technologies, including
the internet, wireless networks, cell
phones, computers, software, middleware,
videoconferencing, social networking, and other media
applications and services.
Interconnect user charges (IUC) Interconnect user charges are the charges paid to the
telecom operator on whose network a
call is terminated.
Lease liability Lease liability represents the present value of future
lease payment obligations.
Leverage An alternative performance measure (non-GAAP). Leverage
(or leverage ratio) is calculated
by dividing net debt at the end of the relevant period by
the underlying EBITDA for the preceding
12 months.
Minutes of usage Minutes of usage refer to the duration in minutes for
which customers use the Group's network
for making and receiving voice calls. It is typically
expressed over a period of one month.
It includes all incoming and outgoing call minutes,
including roaming calls.
Mobile services Mobile services are our core telecom services, mainly
voice and data services, but also including
revenue from tower operation services provided by the
Group and excluding mobile money services.
Net debt An alternative performance measure (non-GAAP). The Group
defines net debt as borrowings including
lease liabilities less cash and cash equivalents, term
deposits with banks, processing costs
related to borrowings and fair value hedge adjustments.
Net debt to underlying EBITDA (LTM) An alternative performance measure (non-GAAP) Calculated
by dividing net debt as at the end
of the relevant period by underlying EBITDA for the
preceding 12 months (from the end of the
relevant period). This is also referred to as the
leverage ratio.
Network towers or "sites" Physical network infrastructure comprising a base
transmission system (BTS) which holds the
radio transceivers (TRXs) that define a cell and
coordinates the radio link protocols with
the mobile device. It includes all ground-based, roof top
and in-building solutions.
Operating company (OpCo) Operating company (or OpCo) is a defined corporate
business unit, providing telecoms services
and mobile money services in the Group's footprint.
Operating free cash flow An alternative performance measure (non-GAAP). Calculated
by subtracting capital expenditure
from underlying EBITDA.
Operating leverage An alternative performance measure (non-GAAP). Operating
leverage is a measure of the operating
efficiency of the business. It is calculated by dividing
operating expenditure (excluding
regulatory charges) by total revenue.
Operating profit Operating profit is a GAAP measure of profitability.
Calculated as revenue less operating
expenditure (including depreciation and amortisation, and
operating exceptional items).
Other revenue Other revenue includes revenues from messaging, value
added services (VAS), enterprise, site
sharing and handset sale revenue.
Reported currency Our reported currency is US dollars. Accordingly, actual
periodic exchange rates are used
to translate the local currency financial statements of
OpCos into US dollars. Under reported
currency the assets and liabilities are translated into
US dollars at the exchange rates prevailing
at the reporting date whereas the statements of profit
and loss are translated into US dollars
at monthly average exchange rates.
Smartphone A smartphone is defined as a mobile phone with an
interactive touch screen that allows the
user to access the internet and additional data
applications, providing additional functionality
to that of a basic phone which is used only for making
voice calls and sending and receiving
text messages.
Smartphone penetration Calculated by dividing the number of smartphone devices
in use by the total number of customers.
Total MBs on network Total MBs consumed (uploaded & downloaded) by customers
on the Group's GPRS, 3G and 4G network
during the relevant period.
Underlying EBIT An alternative performance measure (non-GAAP). Defined as
operating profit before exceptional
items.
Underlying EBITDA An alternative performance measure (non-GAAP). Defined as
operating profit before depreciation,
amortisation, CSR cost and exceptional items.
Underlying EBITDA margin An alternative performance measure (non-GAAP). Calculated
by dividing underlying EBITDA for
the relevant period by underlying revenue for the
relevant period.
Unstructured Supplementary Service Data Unstructured Supplementary Service Data (USSD), also
known as "quick codes" or "feature codes",
is a communications protocol for GSM mobile operators,
similar to SMS messaging. It has a
variety of uses such as WAP browsing, prepaid callback
services, mobile-money services, location-based
content services, menu-based information services, and
for configuring phones on the network.
Voice minutes of usage per customer per month Calculated by dividing the total number of voice minutes
of usage on the Group's network during
the relevant period by the average number of customers
and dividing the result by the number
of months in the relevant period.
Weighted average number of shares The weighted average number of shares is calculated by
multiplying the number of outstanding
shares by the portion of the reporting period those
shares covered, doing this for each portion
and then summing the total.
Abbreviations
2G Second-generation mobile technology
3G Third-generation mobile technology
4G Fourth-generation mobile technology
AAML Airtel Africa Mauritius Limited
ARPU Average revenue per user
bps Basis points
bn Billion
CAGR Compound annual growth rate
Capex Capital expenditure
CSR Corporate social responsibility
EBIT Earnings before interest and tax
EBITDA Earnings before interest, tax, depreciation and
amortisation
EPS Earnings per share
FPPP Financial position and prospects procedures
GAAP Generally accepted accounting principles
GB Gigabyte
GDP Gross domestic product
HoldCo Holding company
IAS International accounting standards
ICT Information and communication technologies
ICT (Hub) Information communication technology (Hub) IFRS
IFRS International financial reporting standards
IMF International monetary fund
IPO Initial public offering
KPIs Key performance indicators
KYC Know your customer
LTE Long-term evolution (4G technology)
LSE London stock exchange
LTM Last 12 months
m Million
MB Megabyte
MI Minority interest (non-controlling interest)
NGO Non-governmental organisation
NSE Nigerian stock exchange
OpCo Operating company
P2P Person to person
PAYG Pay-as-you-go
ppts Percentage points
QoS Quality of service
RAN Radio access network
SIM Subscriber identification module
Single RAN Single radio access network
SMS Short messaging service
SPOC Single point of contact (Vendor SPOC: Designated
person from vendor's side who interacts with
Airtel teams on a regular basis for various requirements)
TB Terabyte
Telecoms Telecommunications
UoM Unit of measure
USSD Unstructured supplementary service data
Risk Factors
The Group's business and the industry in which it operates,
together with all other information contained in this document,
including, in particular, the risk factors summarized below.
Additional risks and uncertainties relating to the Group that are
not currently known to the Group, or that the Group currently deem
immaterial, may individually or cumulatively also have a material
adverse effect on the Group's business, results of operations and
financial condition.
Principal risks summarised
1. We operate in an increasingly competitive environment and
aggressive competition by existing players, or the entry of a new
player could put a downward pressure on prices, adversely affecting
our revenue and profitability.
2. Failure to innovate through simplifying the customer
experience, developing adequate digital touchpoints in line with
changing customer needs and competitive landscape could lead to
loss of customers and market share.
3. An inability to invest and upgrade our network and IT
infrastructure would affect our ability to compete effectively in
the market.
4. Cybersecurity threats through internal or external sabotage
or system vulnerabilities could potentially result in customer data
breaches and/or service downtimes.
5. Adverse changes in our external business environment and / or
supply chain processes leading to a significant increase in our
operating cost structure and negatively impacting
profitability.
6. Due to shortage of skilled telecommunications professionals
in some markets, inability identify and develop successors for key
leadership positions could lead to disruptions in the execution of
our corporate strategy.
7. Our internal control environment is subject to the risk that
controls may become inadequate due to changes in internal or
external conditions, new accounting requirements, delays, or
inaccuracies in reporting.
8. Our telecommunications networks are subject to risks of
technical failures, aging infrastructure, human error, wilful acts
of destruction or natural disasters.
9. Our multinational footprint means we are exposed to the risk
of currency fluctuations including the availability of funds for
repatriation to the Group company triggered by adverse
macroeconomic conditions in the markets where we operate.
10. We operate in a diverse and dynamic legal and regulatory
environment. A failure to comply with relevant laws and regulations
could lead to regulatory penalties, sanctions, and reputational
damage.
11. Disruptions and uncertainties caused by the Covid-19
pandemic may impact the Group's ability to operate its business
effectively and achieve its objectives.
[1] Alternative performance measures (APM) are described on page 49.
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END
FR FIFVEESIFLIL
(END) Dow Jones Newswires
May 12, 2021 02:00 ET (06:00 GMT)
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