TIDMAAF

RNS Number : 8311G

Airtel Africa PLC

29 July 2021

Airtel Africa plc

Results for quarter ended 30 June 2021

29 July 2021

A strong financial and operational performance, with further improvement in revenue growth trends

Highlights

-- Q1'22 Reported revenue grew by 30.7% to $1,112m, with constant currency growth of 33.1%. Revenue growth partially benefitted from a weakened quarter in the prior year during the peak of Covid-19 restrictions across the region. Even after adjusting for these effects, r evenue growth rates for the Group, service segments and reporting regions were all ahead of Q4'21 trends.

-- Strong revenue growth was recorded across all regions: Nigeria up 38.2%, East Africa up 32.8% and Francophone Africa up 24.9%; and across key services, with revenues for voice up 26.0%, data up 37.4% and mobile money up 53.7%.

-- Underlying EBITDA grew by 42.4% to $534m in reported currency, while constant currency growth was 46.2%.

-- Underlying EBITDA margin was 48.0%, an increase of 396 basis points (increase of 428 basis points in constant currency) led by both revenue growth and improved operational efficiencies.

   --     Operating profit was $352m, up 67.6% in reported currency and 73.9% in constant currency. 

-- Profit after tax more than doubled to $142m, up 148.7%, largely due to the higher operating profits along with stable net finance costs which more than offset the increase in tax charges due to increased profits.

-- Basic EPS was 3.3 cents, an increase of 200%, as a result of higher profit and stable finance costs and foreign exchange. EPS before exceptional items was 3.2 cents.

   --     Operating free cash flow (underlying EBITDA less capex) was $428m, up 38.7%. 

-- Customer base grew by 8.4% to 120.8 million, with increased penetration across mobile data (customer base up 14.8%) and mobile money services (customer base up 24.6%). The slowdown in customer base growth was due to new SIM registration regulations in Nigeria; excluding Nigeria the customer base grew by 15.9%.

 
 Alternative performance measures (1)                                  GAAP measures 
  (Quarter ended)                                                       (Quarter ended) 
--------------------------------------------------------------------  ---------------------------------------------- 
 Description               June-21   June-20   Reported    Constant    Description     June-21   June-20   Reported 
                                                currency    currency                                        currency 
------------------------                                              -------------- 
                             $m        $m       change      change                       $m        $m       change 
                                                   %           %                                               % 
------------------------  --------  --------  ----------  ----------  --------------  --------  --------  ---------- 
 Revenue                    1,112      851       30.7%       33.1%     Revenue          1,112      851       30.7% 
------------------------  --------  --------  ----------  ----------  --------------  --------  --------  ---------- 
                                                                       Operating 
 Underlying EBITDA           534       375       42.4%       46.2%      profit           352       210       67.6% 
------------------------  --------  --------  ----------  ----------  --------------  --------  --------  ---------- 
 Underlying EBITDA                                396         428      Profit before 
  margin                    48.0%     44.1%       bps         bps       tax              259       111      132.4% 
------------------------  --------  --------  ----------  ----------  --------------  --------  --------  ---------- 
 EPS before exceptional                                                Profit after 
  items (cents)              3.2       1.0      216.1%                  tax              142       57       148.7% 
------------------------  --------  --------  ----------  ----------  --------------  --------  --------  ---------- 
 Operating free                                                        Basic EPS 
  cash flow                  428       309       38.7%                  (cents)          3.3       1.1      200.0% 
------------------------  --------  --------  ----------  ----------  --------------  --------  --------  ---------- 
 
   ( (1)   Alternative performance measures (APM) are described on page 14. 

Raghunath Mandava, chief executive officer, on the trading update:

"Our Q1'22 results have been very strong, with reported growth of 30.7% in revenue and 42.4% in underlying EBITDA, with constant currency growth of 33.1% and 46.2% respectively. Q1 of last year was impacted by the start of Covid, but even after adjusting for these effects, our Q1'22 revenue growth rates for the Group, service segments and reporting regions were all ahead of Q4'21 trends.

We have posted strong double-digit growth across voice (26.0%), data (37.4%) and mobile money (53.7%), and across all our regions.

Sub-Saharan Africa is now experiencing a third wave of the pandemic. Governments are implementing balanced measures of lockdowns and restrictions. But vaccinations levels remain very low. In these challenging times our business model has so far proven resilient, but we continue to monitor the situation closely for the potential impact on local economies and consumers.

Our total customer base has returned to growth with acceleration in our East Africa and Francophone regions and despite continuing negative net additions in Nigeria. With the easing of these restrictions in late April we have since been able to gradually increase locations for activations in line with regulatory compliance across Nigeria, and we have begun adding new customers.

Our continued focus on modernisation and rollout of our network, along with simplifying our products and improving our distribution, have all helped us to make handsome gains on our ARPUs across voice, data and mobile money. Our robust operating model and solid execution should enable us to continue our profitable growth.

We continue to see huge potential across voice, data and mobile money due to the low penetration levels in Africa, as we continue to partner the nations in bridging the digital divide and enhancing financial inclusion. We remain committed to continue to efficiently and effectively deliver services that help to improve the lives, communities and economies we serve."

---

Airtel Africa plc ("Airtel Africa" or "Group") results for the quarter ended 30 June 2021 are unaudited and in the opinion of management, include all adjustments necessary for the fair presentation of the results of the same period. The financial information has been prepared based on International Accounting Standard 34 (IAS 34) issued by the International Accounting Standards Board (IASB) approved for use in the UK by the UK Accounting Standards Endorsement Board (UKEB) and apply the same accounting policies, presentation and methods of calculation as those followed in the preparation of the Group's annual consolidated financial statements for the year ended 31 March 2021 except to the extent required/ prescribed by IAS 34. This report should be read in conjunction with audited consolidated financial statements and related notes for the year ended 31 March 2021. The comparative information has been drawn based on Airtel Africa plc's Audited Consolidated Financial Statements for the year ended 31 March 2021. Comparative quarterly information is drawn from unaudited IAS 34 financials of respective quarters. All comparatives and references to the 'prior period' or 'previous period' in this report are for the reported metrics for the quarter ended 30 June 2020.

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 at 12:00pm UK time (BST), on Thursday 29 July 2021, including a Question and Answer session.

To receive an invitation with the dial in numbers to participate in the conference call, please register before the event using the following link:

https://services.choruscall.za.com/DiamondPassRegistration/register?confirmationNumber=5445815&linkSecurityString=914c16fb6

Key financial information

 
 Description                       Unit of    Quarter ended 
                                   measure 
-------------------------------              ------------------------------------------ 
                                              June-21   June-20   Reported    Constant 
                                                                   currency    currency 
                                                                    change      change 
                                                                      %           % 
-------------------------------              --------  --------  ----------  ---------- 
 Profit and loss summary 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Revenue (1)                         $m        1,112      851       30.7%       33.1% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
  Voice revenue                      $m         562       454       23.8%       26.0% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
  Data revenue                       $m         356       265       34.5%       37.4% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
  Mobile money revenue 
   (2)                               $m         124       81        52.8%       53.7% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
  Other revenue                      $m         98        78        26.6%       28.6% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Expenses                            $m        (581)     (479)      21.3%       22.9% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Underlying EBITDA (3)               $m         534       375       42.4%       46.2% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
  Underlying EBITDA margin            %        48.0%     44.1%     396 bps     428 bps 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Depreciation and amortization       $m        (182)     (161)      12.6%       13.8% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Operating exceptional 
  items                              $m          -         -        0.0%        0.0% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Operating profit (4)                $m         352       210       67.6%       73.9% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Net finance costs                   $m        (97)      (99)      (1.2%) 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Non-operating exceptional 
  items (5)                          $m          4         -        0.0% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Profit before tax                   $m         259       111      132.4% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Tax                                 $m        (117)     (61)       91.2% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Tax - exceptional items             $m          -         7      (100.0%) 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Total tax charge                    $m        (117)     (54)      114.9% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Profit after tax (6)                $m         142       57       148.7% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Non-controlling interest            $m        (17)      (15)       11.6% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Profit attributable 
  to owners of the company 
  - before exceptional 
  items                              $m         121       38       215.8% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Profit attributable 
  to owners of the company           $m         125       42       199.7% 
-------------------------------              --------  --------  ----------  ---------- 
 EPS - before exceptional 
  items                             cents       3.2       1.0      216.1% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Basic EPS                          cents       3.3       1.1      200.0% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Weighted average no 
  of shares                        million     3,755     3,758     (0.1%) 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Capex                               $m         106       66        59.9% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Operating free cash 
  flow                               $m         428       309       38.7% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Net debt                            $m        3,536     3,425 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Leverage (net debt 
  to underlying EBITDA)             times      1.8x      2.2x 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Return on capital employed           %        18.3%     13.9%      4.3% 
-------------------------------              --------  --------  ----------  ---------- 
 Operating KPIs 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 ARPU                                 $         3.1       2.6       20.6%       22.9% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Total customer base               million     120.8     111.5      8.4% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Data customer base                million     42.4      37.0       14.8% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Mobile money customer 
  base                             million     23.1      18.5       24.6% 
-------------------------------              --------  --------  ----------  ---------- 
 

(1) Revenue includes intra-segment eliminations of $28m for the quarter ended 30 June 2021 and $26m for the prior period.

(2) Mobile money revenue post intra-segment eliminations with mobile services was $96m for the quarter ended 30 June 2021, and $55m for the prior period.

(3) Underlying EBITDA includes other income of $3.5m for the quarter ended 30 June 2021 and $3.3m for the prior period.

(4) Operating profit includes $3.5m CSR (Corporate Social Responsibility) expense in the prior period.

(5) Non-operating exceptional items in the quarter ended 30 June 2021 include a gain of $4m from the profit on the sale of towers in Rwanda.

(6) Profit after tax increase was largely due to higher operating profit more than offsetting the increase in tax charges.

Financial review for the quarter ended 30 June 2021

Our continued focus on execution of our strategy has helped us to deliver another strong set of results for Q1'22. Our revenue growth was more than 30% in reported currency, with constant currency growth of 33.1%, with a strong performance across both our regional segments and our key services. Revenue growth for the quarter partially benefitted from a weakened performance in the first quarter of the prior year during the peak period of Covid-19 related restrictions across the region. Even after adjusting for these effects, our revenue growth rates were ahead of Q4'21 trends for the Group, and across all service segments and reporting regions.

Regionally, revenue in Nigeria grew by 38.2%, in East Africa by 32.8% and in Francophone Africa by 24.9%.

By service segment, mobile services revenue grew by 29.8% in constant currency (27.4% in reported currency), with voice revenue up 26.0%, and data revenue up 37.4%; and mobile money services revenue grew by 53.7% (52.8% in reported currency).

Net finance costs were broadly stable. Tax charges increased by $62m due to higher operating profit, a one-time tax charge and withholding tax on dividends by subsidiaries, with the prior period also benefitting from deferred tax credit recognition.

Basic EPS and EPS before exceptional items significantly improved to 3.3 cents and 3.2 cents respectively, with higher operating profits more than offsetting the increased tax and broadly stable net finance cost and minority interest.

Leverage also improved year on year, to 1.8x at 30 June 2021 from 2.2x at 30 June 2020, despite investing $247m of intangible capex renewing licences in two of our largest markets, Nigeria and Uganda, and acquiring additional spectrum. The increase in underlying EBITDA more than offset the increase in net debt.

GAAP measures

Revenue

Revenue grew by 30.7% to $1,112m in reported currency, driven by constant currency growth of 33.1% partially offset by currency devaluations, mainly in the Nigerian naira (6%) and Zambian kwacha (24.2%), in turn partially offset by appreciation in the Central African franc (6.6%) and Ugandan shilling (5.3%). Revenue growth for the quarter partially benefitted from a weakened performance in the first quarter of the prior year during the peak period of Covid-19 related restrictions across the region.

Operating profit

Operating profit increased by 67.6% to $352m in reported currency, due to a combination of strong revenue growth and improvements in operating efficiency. In constant currency operating profit grew by 73.9%.

Net finance costs

Net finance costs were broadly stable in the period. Effective interest rate increased to 5.0% from 4.7% in the prior year largely as a result of reduction in foreign currency debt and increase in local currency OpCo debt, however interest charges were broadly stable due to lower market debt and slightly higher interest income.

Taxation

Total tax charges increased by $62m, to $117m. The $62m increase in tax charges was due to higher operating profit, a one-time tax case settlement charge of $9m in one of our operating markets and higher withholding tax of $4m on dividends by subsidiaries. The prior period also benefited from the recognition of deferred tax credit of $7m in Tanzania.

Profit after tax

Profit after tax was $142m, a 148.7% increase on the $57m of the prior period. This increase was largely due to higher operating profits along with stable net finance costs, which more than offset the increase in tax charges due to increased profits.

Basic EPS

Basic EPS was 3.3 cents, up from 1.1 cents in the prior period. This increase was mainly due to higher operating profits which more than offset the increased tax charges from higher profits. Net finance cost and minority interest were broadly stable.

Alternative performance measures [1]

Revenue

Constant currency revenue growth of 33.1% was driven by the customer base growth of 8.4% to 120.8 million, and ARPU growth of 22.9%. The slowdown in customer base growth was due to new SIM registration regulations in Nigeria; excluding Nigeria, our customer base grew by 15.9%. The overall ARPU growth of 22.9% was driven by all service segments; with voice contributing 8.7%, data 8.3%, mobile money 4.0%, and the balance coming from other revenue.

Revenue growth was recorded across all our regions. Revenue in Nigeria grew by 38.2%, in East Africa by 32.8% and in Francophone Africa by 24.9%.

Revenue in each of our service segments grew by more than 25%. Revenue for voice grew by 26.0%, for data by 37.4%, and for mobile money by 53.7% (all in constant currency).

Revenue growth for the quarter partially benefitted from a weakened performance in the first quarter of the prior year during the peak period of Covid-19 related restrictions across the region. Even after adjusting for this, revenue growth rates were ahead of Q4'21 trends for the Group, and across all reporting regions and service segments.

Underlying EBITDA

Underlying EBITDA was $534m, an increase of 42.4% in reported currency and 46.2% in constant currency. The growth in underlying EBITDA was driven by revenue growth of 33.1% (in constant currency) and improved operating efficiency. The underlying EBITDA margin was 48.0%, an improvement of 396 basis points in reported currency and 428 basis points in constant currency.

Foreign exchange had an adverse impact of $14.3m on revenue and $8.9m on underlying EBITDA, reflecting currency devaluations, mainly the Nigerian naira and Zambian kwacha, partially offset by appreciation in the Central African franc and Ugandan shilling.

Tax

The effective tax rate was 39.1% compared to 49.7% in the prior period, 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.

Exceptional items

An exceptional gain of $4m was recorded in the quarter ended 30 June 2021 in respect of a profit on the sale of towers in Rwanda. The exceptional gain of $7m in the prior period related to a deferred tax credit recognition in Tanzania.

EPS before exceptional items

EPS before exceptional items for the quarter was 3.2 cents, up from 1.0 cent in the prior period. This increase was mainly due to higher operating profits which more than offset the increased tax charges from higher profits. Net finance cost and minority interest were broadly stable.

Operating free cash flow

Operating free cash flow was $428m, up 38.7% on the prior period, due to higher underlying EBITDA more than offsetting increased capital expenditure. Prior period capital expenditure was lower due to logistical challenges faced during the pandemic.

Leverage

Leverage (net debt to underlying EBITDA) improved year on year, to 1.8x at 30 June 2021 from 2.2x at 30 June 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.

Other significant updates

Sale of towers in Tanzania

In June 2021, Airtel Africa signed a deal for the sale of the tower portfolio belonging to Airtel Tanzania to a joint venture company owned by a wholly owned subsidiary of SBA Communications Corporation, a leading global independent owner and operator of wireless communications infrastructure, as majority owner, and by Paradigm Infrastructure Limited, a UK company focused on developing, owning and operating shared passive wireless infrastructure in selected growth markets.

The tower portfolio in Airtel Tanzania comprises approximately 1,400 towers which form part of the Group's wireless telecommunications infrastructure network. Under the terms of the transaction, the Group's subsidiary, Airtel Tanzania plc, will continue to develop, maintain and operate its equipment on the towers under a separate lease arrangement with the purchaser.

The consideration for the transaction is approximately $175m of which approximately $157.5m is payable on the first closing date (expected to take place in the second half of the Group's current financial year), with the balance payable in instalments upon the completion of the transfer of any remaining towers to the purchaser. Around $60m from the proceeds will be used to invest in network and sales infrastructure in Tanzania and for distribution to the Government of Tanzania, as per the settlement described in the Airtel Africa IPO Prospectus document published in June 2019. The balance of the proceeds will be used to reduce debt at Group level.

New SIM registration rules in Nigeria

As previously highlighted, following a directive issued by the Nigerian Communications Commission (NCC) on 7 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 2.0 million active mobile customers in Nigeria in the first quarter of the year (following on from 2.5 million customer loss in the final quarter of the year to 31 March 2021), however, the financial impact has been minimal, with continued revenue growth, 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 (a branch or kiosk where customers can sign up to Airtel). Airtel Nigeria has so far received approvals for over 2,100 outlets and new customer registrations have recommenced in those outlets accordingly. The NCC also issued a further directive in April with the effect that no individual customers can register more than four SIM cards under one NIN on any network.

The original regulatory 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 31 October 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 40.9 million active customers, we have collated NIN information for over 25.0 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.

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 was used to partially refinance the Group's EUR750m euro denominated bond due 20 May 2021. The balance of the euro denominated bond was 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 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.

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 three 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 three 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.

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, was appointed as an executive director and joined the Board of Airtel Africa plc with effect from 1 June 2021.

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 .

Financial review for the quarter ended 30 June 2021

Nigeria

 
 Description                       Unit of    Quarter ended 
                                   measure 
-------------------------------  ----------  ------------------------------------------ 
                                              June-21   June-20   Reported    Constant 
                                                                   currency    currency 
                                                                    change      change 
                                                                      %           % 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Summarised statement 
  of operations 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Revenue                             $m         445       341       30.5%       38.2% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
  Voice revenue                      $m         238       197       20.8%       28.0% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
  Data revenue                       $m         171       122       40.5%       48.8% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
  Other revenue (1)                  $m         36        22        61.4%       70.9% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Underlying EBITDA                   $m         246       182       35.3%       43.3% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
  Underlying EBITDA 
   margin                             %        55.2%     53.3%     195 bps     195 bps 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Depreciation and amortisation       $m        (63)      (52)       20.8%       28.0% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Exceptional item                    $m          -         -        0.0%        0.0% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Operating profit                    $m         183       130       41.2%       49.5% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Capex                               $m         49        30        60.4%       60.4% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Operating free cash 
  flow                               $m         197       152       30.0%       39.6% 
-------------------------------              --------  --------  ----------  ---------- 
 Operating KPIs 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 ARPU                                 $         3.6       2.7       31.9%       39.7% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Total customer base               million     40.9      42.5      (3.9%) 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Data customer base                million     17.8      17.3       2.5% 
-------------------------------              --------  --------  ----------  ---------- 
 

(1) Other revenue includes inter-segment revenue of $0.5m in the quarter ended 30 June 2021. Excluding inter-segment revenue, other revenue was $35m in the quarter ended 30 June 2021.

Reported currency revenue grew by 30.5%, with constant currency revenue growth of 38.2% offset by Nigerian naira devaluation of 6% (YoY). Revenue growth for the quarter partially benefitted from a weakened performance in the first quarter of the prior year during the peak period of Covid-19 related restrictions in Nigeria. Even after adjusting for this, revenue growth rates were ahead of Q4'21 trends. Overall ARPU in Nigeria grew by 39.7%, driven by a 17% growth contribution from voice, 18% from data and the balance from other revenue.

Voice revenue grew by 28.0%, driven by voice ARPU growth of 29.3% from an identical increase in voice usage per customer. The customer base decline of 1.6 million from the prior period, and 1.1 million in the quarter, was due to the implementation of the new "Know-Your-Customer" (KYC) requirements in Nigeria which had included a temporary halt to new customer activations. New activations have been permitted in regulatory approved outlets since the end of April 2021.

Data revenue grew by 48.8% in constant currency, driven by data ARPU growth of 41.5%, supported by a 42.2% increase in data consumption per customer (to 3.8 GB per month from 2.7 GB per month), combined with data customer base growth of 2.5%. The customer base growth was driven by expansion of our 4G network, with 87.3% of total sites now on 4G, and an increase in smartphone penetration. Data customer penetration increased by 2.7 percentage points to 43.5% compared with previous period. Data revenue accounted for 38.5% of total revenue in the quarter, up 2.7 percentage points from 35.7% in the prior period. The 4G data customer base now contributes to 40.2% of the total data customer base with a total data usage contribution of 69%, up from 57.9% in prior period.

Other revenue grew by 70.9%, with the main contribution coming from the growth in value added services revenue, led by airtime credit services.

Underlying EBITDA was $246m, up by 35.3% in reported currency, with a constant currency growth of 43.3%. Underlying EBITDA margin was at 55.2%, an increase of 195 basis points in both reported and constant currency. The margin expansion was due to improvements in operational efficiency.

Capital expenditure was $49m, 60.4% higher than the prior period due to the logistical challenges faced earlier in the pandemic. Operating free cash flow was $197m, up 39.6%, due to expansion of the underlying EBITDA marginally offset by higher capital expenditure.

East Africa (1)

 
 Description                       Unit of    Quarter ended 
                                   measure 
-------------------------------  ----------  ------------------------------------------ 
                                              June-21   June-20   Reported    Constant 
                                                                   currency    currency 
                                                                    change      change 
                                                                      %           % 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Summarised statement 
  of operations 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Revenue (2)                         $m         394       305       29.5%       32.8% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
  Voice revenue                      $m         178       143       24.8%       27.8% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
  Data revenue                       $m         105       86        22.6%       25.3% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
  Mobile money revenue 
   (4)                               $m         91        58        57.6%       62.4% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
  Other revenue (3)                  $m         38        35        8.5%        10.9% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Underlying EBITDA                   $m         184       129       42.5%       45.7% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
  Underlying EBITDA margin            %        46.6%     42.4%     425 bps     414 bps 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Depreciation and amortisation       $m        (58)      (53)       8.5%        10.4% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Exceptional item                    $m          -         -        0.0%        0.0% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Operating profit (5)                $m         126       74        69.7%       74.1% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Capex                               $m         33        19        70.6%       70.6% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Operating free cash 
  flow                               $m         151       110       37.6%       41.2% 
-------------------------------              --------  --------  ----------  ---------- 
 Operating KPIs 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 ARPU                                 $         2.4       2.1       15.3%       18.2% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Total customer base               million     55.4      48.8       13.6% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Data customer base                million     17.3      14.0       23.2% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Mobile money customer 
  base                             million     19.2      15.5       23.9% 
-------------------------------              --------  --------  ----------  ---------- 
 

(1) The East Africa business region includes Kenya, Malawi, Rwanda, Tanzania, Uganda and Zambia.

(2) Revenue includes intra-segment eliminations of $18m for the quarter ended 30 June 2021 and $17m for the quarter ended 30 June 2020.

(3) Other revenue includes inter-segment revenue of $1.3m in the quarter ended 30 June 2021. Excluding inter-segment revenue, other revenue was $37m in the quarter ended 30 June 2021.

(4) Mobile money revenue post intra-segment eliminations with mobile services was $73m for the quarter ended 30 June 2021 and $41m for the prior period.

(5) Operating profit includes CSR (Corporate social responsibility) expense of $1.5m in the prior period.

East Africa continued to deliver a strong set of results, with reported currency revenue growth of 29.5%. In constant currency, revenue growth was 32.8% with strong contributions across all service segments; voice revenue growing by 27.8%, data revenue by 25.3% and mobile money revenue by 62.4%. Reported currency revenue growth reflects the strong constant currency revenue growth partially offset by currency devaluation, mainly in Zambia and Malawi, while the Ugandan shilling appreciated. Revenue growth for the quarter partially benefitted from a weakened performance in the first quarter of the prior year during the peak period of Covid-19 related restrictions across the region. Even after adjusting for this, revenue growth rates were slightly ahead of Q4'21 trends.

Voice revenue grew by 27.8%, driven by customer base growth of 13.6% and voice ARPU growth of 13.8%. The customer base growth was driven largely by the expansion of our network coverage and distribution network. Voice ARPU growth was driven largely by the increase in voice usage per customer of 7.5%, to 335 minutes per customer per month in Q1'22.

Data revenue grew by 25.3%, mainly driven by data customer base growth of 23.2% and data ARPU growth of 2.0%. The customer base growth was supported by the expansion of our 4G network infrastructure, with almost 80% of sites now on 4G in East Africa, compared with 68% during the prior period. Data ARPU growth was driven by an increase in usage per customer of 13.2%, reaching 3.0 GB per customer per month from 2.6 GB in the prior period. The 4G data customer base now contributes 34.5% of the total data customer base, with a total data usage contribution of 56.8%, up from 43.4% in previous period.

Mobile money revenue grew by 62.4%, largely driven by growth in Tanzania, Zambia, Uganda and Malawi. Revenue growth was driven by both customer base growth of 23.9% and ARPU growth of 34.5%, due largely to expansion of our distribution network. Mobile money ARPU growth was driven by the 39.3% growth in transaction value per customer (from $131 per customer per month to $176 per customer per month). Mobile money revenue accounted for 23.2% of total revenue in the quarter, up 4.2 percentage points from 19.0% in the prior period.

Underlying EBITDA margin was 46.6%, an improvement of 425 basis points in reported currency and 414 basis points in constant currency, led by both accelerated growth in revenue and efficiency improvements in operating expenses.

Capital expenditure was $33m, up 70.6% on the prior period due to planned network expansion. Operating free cash flow was $151m, up 41.2% due to the growth in underlying EBITDA.

Francophone Africa (1)

 
 Description                       Unit of    Quarter ended 
                                   measure 
-------------------------------  ----------  ------------------------------------------ 
                                              June-21   June-20   Reported    Constant 
                                                                   currency    currency 
                                                                    change      change 
                                                                      %           % 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Summarised statement 
  of operations 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Revenue (2)                         $m         276       209       31.6%       24.9% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
  Voice revenue                      $m         146       117       25.2%       18.7% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
  Data revenue                       $m         80        57        39.4%       32.1% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
  Mobile money revenue 
   (3)                               $m         33        23        41.3%       34.1% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
  Other revenue                      $m         26        21        22.4%       17.9% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Underlying EBITDA                   $m         111       74        51.0%       44.2% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
  Underlying EBITDA margin            %        40.3%     35.1%     520 bps     541 bps 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Depreciation and amortisation       $m        (53)      (48)       9.0%        3.6% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Exceptional item                    $m          -         -        0.0%        0.0% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Operating profit (4)                $m         58        25       138.4%      129.0% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Capex                               $m         21        16        33.3%       33.3% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Operating free cash 
  flow                               $m         90        58        56.0%       47.1% 
-------------------------------              --------  --------  ----------  ---------- 
 Operating KPIs 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 ARPU                                 $         3.9       3.5       11.0%       5.4% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Total customer base               million     24.5      20.2       21.5% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Data customer base                million      7.4       5.6       31.6% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Mobile money customer 
  base                             million      3.9       3.0       28.4% 
-------------------------------              --------  --------  ----------  ---------- 
 

(1) The Francophone Africa business region includes Chad, Democratic Republic of the Congo, Gabon, Madagascar, Niger, Republic of the Congo, and The Seychelles.

(2) Revenue includes intra-segment eliminations of $10m for the quarter ended 30 June 2021 and $9.6m for the quarter ended 30 June 2020.

(3 () Mobile money revenue post intra-segment eliminations with mobile services was $23m in the quarter ended 30 June 2021 and $14m in the quarter ended 30 June 2020.

(4) Operating profit includes CSR (Corporate Social Responsibility) expense of $0.7m in the quarter ended 30 June 2020.

Francophone Africa has delivered another strong business performance, with the highest reported currency revenue growth of the regions at 31.6%. In constant currency revenue growth was 24.9%. The reported currency revenue growth is higher than in constant currency due to appreciation of the Central African franc. All the Francophone Africa OpCos delivered positive revenue growth. Revenue growth for the quarter partially benefitted from a weakened performance in the first quarter of the prior year during the peak period of Covid-19 related restrictions across the region. Even after adjusting for this, revenue growth rates were ahead of Q4'21 trends.

Voice revenue grew by 18.7% in constant currency mainly driven by the customer base growth of 21.5%. Total voice minutes on the network grew by 32.2% due to increased voice usage per customer (up 11.5%) and customer base growth.

Data revenue grew by 32.1% in constant currency, driven by customer growth of 31.6%. Data usage per customer increased 23.2% to 2.3 GB per customer per month, from 1.8 GB per customer per month in the prior period. The data customer base growth was driven largely by the expansion of our 4G network, with 60% of total sites now on 4G, and adoption of our "more for more" bundle offerings, up 18.4%. The 4G data customer base now contributes 40% to the total data customer base, with a total data usage contribution of 61.5%, up from 49.2% in the prior period.

Mobile money revenue grew by 34.1%, largely driven by a 28.4% increase in the mobile money customer base, supported by the expansion of our distribution network through more agents and Airtel Money branches.

Underlying EBITDA margin was 40.3% during the period, an improvement of 520 basis points in reported currency and 541 basis points in constant currency, driven by revenue growth and increased efficiency in operating expenses.

Capital expenditure was $21m, higher by 33.3%. Operating free cash flow was $90m, up 47.1%, due to the improvement in underlying EBITDA.

Mobile services

 
 Description                       Unit of    Quarter ended 
                                   measure 
-------------------------------              ------------------------------------------ 
                                              June-21   June-20   Reported    Constant 
                                                                   currency    currency 
                                                                    change      change 
                                                                      %           % 
-------------------------------              --------  --------  ----------  ---------- 
 Summarised statement 
  of operations 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Revenue (1)                         $m        1,018      799       27.4%       29.8% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Underlying EBITDA                   $m         481       345       39.3%       43.2% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
  Underlying EBITDA margin            %        47.2%     43.2%     402 bps     443 bps 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Depreciation and amortisation       $m        (171)     (151)      13.0%       14.2% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Operating exceptional 
  items                              $m          -         -         0%         0.0% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Operating profit (2)                $m         310       192       61.5%       68.4% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Capex                               $m         100       64        55.7%       55.7% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Operating free cash 
  flow                               $m         381       281       35.5%       40.3% 
-------------------------------              --------  --------  ----------  ---------- 
 Operating KPIs 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Mobile voice 
-------------------------------  ----------  --------  --------  ----------  ---------- 
  Voice revenue                      $m         562       454       23.8%       26.0% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
  Customer base                    million     120.8     111.5      8.4% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
  Voice ARPU                          $         1.6       1.4       14.2%       16.3% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Mobile data 
-------------------------------  ----------  --------  --------  ----------  ---------- 
  Data revenue                       $m         356       265       34.5%       37.4% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
  Data customer base               million     42.4      37.0       14.8% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
  Data ARPU                           $         2.9       2.5       16.0%       18.5% 
-------------------------------              --------  --------  ----------  ---------- 
 

(1) Mobile service revenue after intersegment eliminations was $1,016m in the quarter ended 30 June 2021 and $798m in the quarter ended 30 June 2020.

(2) Operating profit includes CSR (Corporate Social Responsibility) expense of $2.3m in prior period.

Mobile services revenue grew by 27.4% in reported currency with constant currency growth of 29.8%, and both voice and data revenue contributing to the growth. Revenue growth for the quarter partially benefitted from a weakened performance in the first quarter of the prior year during the peak period of Covid-19 related restrictions across the region. Even after adjusting for this, revenue growth rates were ahead of Q4'21 trends.

Voice revenue increased 26.0% in constant currency, driven by customer base growth of 8.4% and voice ARPU growth of 16.3%. The customer base growth was driven by expansion of the distribution network and network infrastructure. The slowdown in customer base growth of recent quarters has been due to the new SIM registration regulations in Nigeria. Excluding Nigeria, the rest of the customer base grew by 15.9%. Since the end of April activations have recommenced in regulatory approved outlets across Nigeria. Voice ARPU growth was driven by an increase in voice usage per customer of 14.3% to 249 minutes per customer per month, resulting in overall minutes growth of 23.8%.

Data revenue grew by 37.4% in constant currency, largely driven by growth in the data customer base of 14.8% and data ARPU growth of 18.5%. The data customer base growth was driven by expansion of our 4G network infrastructure, with 79.4% of sites now operating on 4G, compared with 66.7% in the prior period, and increased smartphone penetration, up almost 1 percentage point. The data customer base as a proportion of total customers reached 35.1%, an increase of 2 percentage points. The data ARPU growth of 18.5% was driven largely by the increase in data consumption per customer, up 26.7% to 3.2 GB per month (from 2.5 GB per month). Growing penetration of 4G helped to drive the data ARPU growth. The 4G data customer base now contributes 37.9% to the total data customer base, with a total data usage contribution from 4G of 63.6%, up from 51.2% in previous period.

Data revenue contribution reached 32.1% of total Group revenue in the quarter, up from 31.1% in the prior period.

Mobile money

 
 Description                       Unit of    Quarter ended 
                                   measure 
-------------------------------              ------------------------------------------ 
                                              June-21   June-20   Reported    Constant 
                                                                   currency    currency 
                                                                    change      change 
                                                                      %           % 
-------------------------------              --------  --------  ----------  ---------- 
 Summarised statement 
  of operations 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Revenue (1)                         $m         124       81        52.8%       53.7% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Underlying EBITDA                   $m         60        39        53.5%       53.3% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
  Underlying EBITDA margin            %        48.8%     48.5%     24 bps     (12) bps 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Depreciation and amortisation       $m         (3)       (3)       0.2%       (1.2%) 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Operating profit                    $m         57        36        57.9%       57.6% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Capex                               $m          3         2        85.4%       85.4% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Operating free cash 
  flow                               $m         57        37        52.4%       51.2% 
-------------------------------              --------  --------  ----------  ---------- 
 Operating KPIs 
-------------------------------  ----------  --------  --------  ----------  ---------- 
 Mobile money key KPIs 
-------------------------------  ----------  --------  --------  ----------  ---------- 
  Transaction value                  $m       14,651     9,007      62.7%       64.4% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
  Active customers                 million     23.1      18.5       24.6% 
-------------------------------  ----------  --------  --------  ----------  ---------- 
  Mobile money ARPU                   $         1.8       1.5       24.7%       25.4% 
-------------------------------              --------  --------  ----------  ---------- 
 

(1) Mobile money service revenue post inter-segment eliminations with mobile services was $96m in the quarter ended 30 June 2021 and $55m in the quarter ended 30 June 2020.

Mobile money revenue grew by 52.8% to $124m in reported currency. In constant currency mobile money revenue grew 53.7%. Revenue growth for the quarter partially benefitted from a weakened comparative in the first quarter of the prior year due to Covid-19 restrictions and waiver of charges on certain transactions in a few markets to support those economies . Even after adjusting for these effects, the revenue growth rate was ahead of the Q4'21 trend. The Q1'22 constant currency revenue growth of 53.7% was driven by 24.6% growth of the customer base and 25.4% growth in ARPU, led by transaction value per customer growth of 34.2%. The customer base growth was largely driven by expansion of our distribution network, as we continued to invest in exclusive kiosks and mobile money branches. 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 53.5% to $60m in reported currency. In constant currency, underlying EBITDA grew by 53.3%. Underlying EBITDA margin was 48.8%, an improvement of 24 basis points in reported currency, while in constant currency the underlying EBITDA margin dropped by 12 basis points. The total transaction value grew by 64.4% in constant currency, driven by customer base growth and growth in the transaction value per customer per month of 34.2% (to $217 per month in Q1'22). The Q1'22 annualised transaction value reached $58.3bn in constant currency, with mobile money revenue contributing 11.1% of total revenue in the quarter.

The mobile money customer base reached 23.1 million at 30 June 2021, up 24.6% from the prior period, with 19.1% of our total customer base now Airtel Money customers, an increase of 2.5 percentage points. Mobile money ARPU grew by 25.4%, 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 our reporting regions and service segments are provided in constant currency as this better represents the underlying performance of the business.

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                         Definition and 
                   equivalent IFRS                                                                       purpose 
                   measure 
                                                                                                   ------------------- 
 Underlying        Operating profit                                                                 The Group defines 
 EBITDA and                             *    Depreciation and amortisation                          underlying EBITDA 
 margin                                                                                             as operating 
                                                                                                    profit/ (loss) for 
                                        *    Charity and donation                                   the period before 
                                                                                                    depreciation 
                                                                                                    and amortisation, 
                                        *    Exceptional items                                      charity and 
                                                                                                    donation and 
                                                                                                    adjusted for 
                                                                                                    exceptional items. 
                                                                                                    Group defines 
                                                                                                    underlying EBITDA 
                                                                                                    margin as 
                                                                                                    underlying EBITDA 
                                                                                                    divided by total 
                                                                                                    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 / (loss)                                                                  The Group defines 
 profit / (loss)   before tax           *    Exceptional items                                      underlying profit 
 before tax                                                                                         / (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                                                                     The Group defines 
 rate              rate                *    Exceptional items                                       effective tax rate 
                                                                                                    as reported tax 
                                                                                                    rate (reported tax 
                                       *    Foreign exchange rate movements                         charge divided by 
                                                                                                    reported profit 
                                                                                                    before tax) 
                                       *    One-off tax impact of prior period, tax litigation      adjusted for 
                                            settlement and impact of tax on permanent differences   exceptional items, 
                                                                                                    foreign exchange 
                                                                                                    rate movements 
                                                                                                    and one-off tax 
                                                                                                    items of prior 
                                                                                                    period 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 period 
                                                                                                    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. 
----------------  -----------------  ------------------------------------------------------------  ------------------- 
 Underlying        Profit/(loss)                                                                    The Group defines 
 profit/(loss)     for the period       *    Exceptional items                                      underlying profit 
 after tax                                                                                          / (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                                                                              The Group defines 
 share before                           *    Exceptional items                                      earnings per share 
 exceptional                                                                                        before exceptional 
 items                                                                                              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 free    Cash generated                                                                   The Group defines 
 cash flow         from operating       *    Income tax paid                                        operating free 
                   activities                                                                       cash flow as net 
                                                                                                    cash generated 
                                        *    Changes in working capital                             from operating 
                                                                                                    activities 
                                                                                                    before income tax 
                                        *    Other non-cash items                                   paid, changes in 
                                                                                                    working capital, 
                                                                                                    other non-cash 
                                        *    Non-operating income                                   items, 
                                                                                                    non-operating 
                                                                                                    income, 
                                        *    Charity and donation                                   charity and 
                                                                                                    donation and 
                                                                                                    exceptional items 
                                        *    Exceptional items                                      less capital 
                                                                                                    expenditures. The 
                                                                                                    Group views 
                                        *    Capital expenditures                                   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. 
----------------  -----------------  ------------------------------------------------------------  ------------------- 
 Net debt and      No direct                                                                        The Group defines 
 leverage ratio    equivalent             *    Borrowing                                            net debt as 
                                                                                                    borrowings 
                                                                                                    including lease 
                                          *    Lease liabilities                                    liabilities less 
                                                                                                    cash and cash 
                                                                                                    equivalents, 
                                          *    Cash and cash equivalent                             term deposits with 
                                                                                                    banks, processing 
                                                                                                    costs related to 
                                          *    Term deposits with banks                             borrowings and 
                                                                                                    fair value hedge 
                                                                                                    adjustments. 
                                          *    Fair value hedges                                    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                                                                        Group defines 
 capital           equivalent           *    Exceptional items to arrive at underlying EBIT         return on capital 
 employed                                                                                           employed ('ROCE') 
                                                                                                    as underlying EBIT 
                                                                                                    divided by average 
                                                                                                    capital 
                                                                                                    employed. 
                                                                                                    The directors view 
                                                                                                    return on capital 
                                                                                                    employed as a 
                                                                                                    financial ratio 
                                                                                                    that measures the 
                                                                                                    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. 
                                                                                                    For quarterly 
                                                                                                    computations, ROCE 
                                                                                                    is calculated by 
                                                                                                    dividing 
                                                                                                    Underlying EBIT 
                                                                                                    for the preceding 
                                                                                                    12 months by the 
                                                                                                    average capital 
                                                                                                    employed (being 
                                                                                                    the average of the 
                                                                                                    capital employed 
                                                                                                    averages 
                                                                                                    for the preceding 
                                                                                                    four quarters). 
----------------  -----------------  ------------------------------------------------------------  ------------------- 
 

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 2021. Reported currency percentage change is derived on the basis of average actual periodic exchange rates for that financial period. Variances between constant currency and reported currency percentages are due to exchange rate movements between the previous financial reporting period and the current period.

Changes to APMs

No exceptional revenue has been recorded for the quarter ended 30 June 2021 or prior period. Hence, underlying revenue has not been defined as an APM for this quarter. No deferred tax has been recorded under exceptional tax item for the quarter ended 30 June 2021. Hence adjusted effective tax rate has similarly not been defined as an APM for this quarter. Finally, the dividend is no longer linked with free cash flow. Hence, free cash flow is no longer defined as an APM.

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 (mobile 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 
                                                             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                                   Total number of active subscribers who have enacted any 
                                                             mobile money usage event in last 30 
                                                             days. 
----------------------------------------------------------  ---------------------------------------------------------- 
Airtel Money customer penetration                            The proportion of total Airtel Africa active mobile 
                                                             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                               Any financial transaction performed on Airtel Africa's 
                                                             mobile money platform. 
----------------------------------------------------------  ---------------------------------------------------------- 
Airtel Money transaction value per customer per month        Calculated by dividing the total mobile money transaction 
                                                             value on the Group's mobile money 
                                                             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 reporting regions and service segments are in 
                                                             constant currency as it better represent 
                                                             the underlying performance of the business. Constant 
                                                             currency growth for prior periods are 
                                                             calculated using closing exchange rates as at the end of 
                                                             prior period. 
----------------------------------------------------------  ---------------------------------------------------------- 
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 feature 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 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 
----------  ------------------------------------------------ 
ARPU         Average revenue per user 
----------  ------------------------------------------------ 
bn           Billion 
----------  ------------------------------------------------ 
bps          Basis points 
----------  ------------------------------------------------ 
CAGR         Compound annual growth rate 
----------  ------------------------------------------------ 
Capex        Capital expenditure 
----------  ------------------------------------------------ 
CSR          Corporate social responsibility 
----------  ------------------------------------------------ 
DTA          Deferred Tax Asset 
----------  ------------------------------------------------ 
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 
----------  ------------------------------------------------ 
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) 
----------  ------------------------------------------------ 
LTM          Last 12 months 
----------  ------------------------------------------------ 
m            Million 
----------  ------------------------------------------------ 
MB           Megabyte 
----------  ------------------------------------------------ 
MI           Minority interest (non-controlling interest) 
----------  ------------------------------------------------ 
NGO          Non-governmental organisation 
----------  ------------------------------------------------ 
OpCo         Operating company 
----------  ------------------------------------------------ 
P2P          Person to person 
----------  ------------------------------------------------ 
PAYG         Pay-as-you-go 
----------  ------------------------------------------------ 
QoS          Quality of service 
----------  ------------------------------------------------ 
RAN          Radio access network 
----------  ------------------------------------------------ 
SIM          Subscriber identification module 
----------  ------------------------------------------------ 
Single RAN   Single radio access network 
----------  ------------------------------------------------ 
SMS          Short messaging service 
----------  ------------------------------------------------ 
TB           Terabyte 
----------  ------------------------------------------------ 
Telecoms     Telecommunications 
----------  ------------------------------------------------ 
UoM          Unit of measure 
----------  ------------------------------------------------ 
USSD         Unstructured supplementary service data 
----------  ------------------------------------------------ 
 
   [1]   Alternative performance measures (APM) are described on page 14. 

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July 29, 2021 02:00 ET (06:00 GMT)

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