Blue Label Telecoms Blue Label Telecoms Final Results Presentation - - PowerPoint PPT Presentation

Blue Label Telecoms Blue Label Telecoms

Final Results Presentation for the year ended 31 May 2009 y y

AGENDA

• Strategic Overview
• International Distribution
• Technology

gy

• Value Added Services
• Financial Overview

Financial Overview

• South African Distribution

Way Forward

• Way Forward

Strategic Overview

Mark Levy Mark Levy Joint CEO

3

Group Structure

South African Distribution International Distribution Technology Value Added Services

The Prepaid Company Gold Label Activi Technology Services Datacel Crown Cellular Oxigen Services India - Transaction Junction - Cellfind Crown Cellular 37.22% 60% Cellfind Ventury Ukash – 16.9% Activi Deployment Services Content Connect Africa Blue Label One Matragon APS - 72% Blue Label One t/a Mobile Services Company (MSC) Kwikpay APS DRC - 90% Virtual Voucher APS MOZAMBIQUE - 80% APS NIGERIA - 51% Blue Label Mexico - 70% Sharedphone 50.1%

• 100% unless otherwise stated

4

Blue Label Australasia 50.5%

The Telecoms Landscape

• Emerging markets have continued to grow,

g g g , posting growth figures in the single digits instead of double-digit expansion

• In South Africa Prepaid ARPU is stable

In South Africa, Prepaid ARPU is stable

• In the less evolved markets consumer

expenditure is also largely stable or dropping only slightly dropping only slightly

• Total mobile subscribers or SIMs in the local

market are expected to reach 56 million by the end of 2009

• Mobile penetration expected to increase

from 122% to over 150% by 2013 y

• South African cellular market surpassed the

50-million connections milestone at the end

• f 2008 although only 68% of these
• f 2008, although only 68% of these

represented individual users

Source: (1) Creamer Media’s Engineering News Online; 31 July 2009; “SA cellular market exceeds 50 million connections mark (2) IDC EMCA Telecoms Services Dababase, Q1 2009

5

Global footprint

Bricks & mortar Technology offerings

Af h i t

United Kingdom

• Afghanistan
• Bangladesh
• Benin
• Botswana
• Cyprus
• Czech Republic
• France
• Germany
• Ghana
• Guinea Bissau

Kingdom I di

• Greece
• Haiti
• Indonesia
• Ireland
• Israel
• Italy
• Ivory Coast
• Lesotho
• Liberia
• Middle East Region

Mexico DRC India Nigeria

• Middle East Region
• Netherlands
• Pakistan
• Poland
• Russia
• Rwanda
• Sierra Leone
• Spain
• Sudan
• Swaziland

S d

South Africa Mozambique Australia

• Sweden
• Syria
• Tanzania
• Togo
• Uganda
• USA
• Yemen
• Zimbabwe

Two strategies for international expansion:

• Bricks and Mortar
• Technology Offerings

6

BLT is focused on servicing the unbanked and badly banked market by providing access to cost effective transactional services

International Distribution

Mark Levy Mark Levy Joint CEO

7

International Operations

• verview
• Enhance all technology offerings
• Continue to focus on growth of footprint
• Continue to focus on growth of footprint
• Introduce to existing markets all Blue Label

Telecoms’ products and services

• Providing additional tokens of value
• Providing additional tokens of value,

enhancing each country’s service offering and revenue streams

• Improved melded margin

8

I di India

Total connections 430,290,998 % Growth in total connections p.a. 48.48% Prepaid as % of total connections 85.14% Market penetration 30.34% Prepaid ARPU (USD/month) 4.50

9

Consolidation of Oxigen India

• Proactive reduction in operating costs and cost management
• Revision of sales and revenue-generation strategies through:
• Rejuvenation, recovery and re-deployment of POS devices
• Higher rate of integration into retail
• Additional POS devices due to improved technical competence
• Direct Top-Up comprising 70% of prepaid recharge market
• Further expansion of product offering – in addition to airtime, rail, and toll
• Consolidation of technology solution and competencies including:
• Backend management and maintenance
• Hardware enhancements with increased capacity and capabilities
• Improved communications connectivity and reliability

10

Oxigen India

• Consolidation of the retail base
• Consolidation of the retail base
• Selling base increased during the period

Average sale per store increased

• Average sale per store increased
• Selling Web vending sites and average sales

per site doubled during the period

• Airtime sales growth
• Sales Revenues grew consistently
• Oxicash
• Steady growth with a total in excess of 1.1

million wallets by the end of May 2009

11

Oxigen India – Breakthrough Initiatives

state bank of india

• PINless top-up of airtime and Oxicash on mobile to consumer
• Integration complete and live beta testing commenced

nokia

• vi store
• Oxicash is the exclusive mobile transactional partner for all Nokia products
• Fulfill Nokia Extended Warranty

nokia – ovi store

• Oxigen for airtime sales through all Nokia branches

bank switch

• mCheck – integrated and deployed for Oxigen and subsequent Oxicash

integration

• Obopay – integration has commenced
• Improve connectivity, contain communications costs and reduce barrier to

new cdma pos terminal roll-out

entry for new POS sites

12

M i Mexico

Total connections 87,079,422 % Growth in total connections p.a. 13.47% p Prepaid as % of total connections 88.62% Market penetration 70.46% Prepaid ARPU (USD/month) 8.31 Prepaid ARPU (USD/month) 8.31

13

Blue Label Mexico

• Localisation, customisation and

, enhancements to the Blue Label AEON platform saw launch and commencement of trading in May 2009 trading in May 2009

• Enhanced technology provides PINless

h l ti b i recharge on a real-time basis

• Public Telephony launch in conjunction with

p y j Telefonica, utilising our Sharedphone product and service, commenced in 2009 with a pilot of 2,000 units through to with a pilot of 2,000 units through to September

14

Blue Label Mexico

• Several Agreements for electronic airtime

g distribution technology signed with the distribution channels involving:

• POS implementation
• Multiple channel retail outlet integration

f

• Petroleum forecourts
• Convenience outlets

Mi fi i

• Micro-finance companies
• Provides BLM with in excess of 7,500 points
• f presence
• f presence
• Since the roll-out of POS, the average sales

transactional value per site has increased p per site per month

15

United Ki d Kingdom

16

Ukash

• Consumer ability to Cash In, elect to

y , transact online or in a mobile environment, and to Cash Out at their convenience

• The business model of Ukash and its ease

The business model of Ukash and its ease

• f integration to third party devices and

technology provides for rapid deployment and broad coverage based on the existing and broad coverage based on the existing retail presence of the third party

• Points of presence have grown – giving

Uk h i i l t t i E Ukash more issuing real estate in Europe and abroad as follows:

• Continued growth in Europe

R i d i t t i th USA

• Remained consistent in the USA
• Launched in South Africa through BLT

channels, Pick ‘n Pay R tl l h d i A t li

• Recently launched in Australia

17

Ukash

status

• Points of Sale network continues to increase

through 7 new markets P t S i id idi

• Payment Service providers are now providing

expansion of Merchant acceptance

• Physical outlets expanded in Portugal, Italy

Physical outlets expanded in Portugal, Italy Germany, France, Belgium, Slovenia, Poland and Australia

• Growth continues per annum
• MasterCard selected Ukash for Europe for re-

Power Power

• AUTP selected Ukash for cash payment for

airline industry

• Spain – issuance of Ukash through ATM

18

Ukash – Successes over last 6 months

• Live in
• Portugal, Italy, Slovenia and Australia
• On-line issue

On line issue

• Buying Ukash online through bank account
• Skype

Skype

• Extended Ukash offering in Russia and

Ukraine

• Key payment
• Service provider in South Africa

19

African Prepaid Services

20

Africa Prepaid Services

Nigeria Democratic Republic of Congo Mozambique

21

Africa Prepaid Services (“APS”)

group

• APS SA is responsible for implementation
• f our African expansion initiative
• APS concluded an agreement with

Multilinks-Telkom for Nigeria

• Set up in Nigeria necessitated

employment of skilled and experienced staff subsequently transferred across to q y Nigeria

22

Africa Prepaid Services

M bi Mozambique

Total connections 6 245 965 Total connections 6,245,965 % Growth in total connections p.a. 24.70% Prepaid as % of total connections 98.49% Market penetration 25.71%

23

Prepaid ARPU (USD/month) 3.60

Africa Prepaid Services

mozambique

• Expansion programme launched and

commencing through:

• Increase in cash generating assets
• Additional 5 new branches became fully

ti l i l

• perational in more rural areas as per

Vodacom

• Started showing monthly improvement with
• Started showing monthly improvement with

the upward trend expected to continue in growth and profitability

• Awarded “Best Distributor of the Year” by

Vodacom for the third consecutive year

24

Africa Prepaid Services

Democratic Republic of C

Total connections 10 990 451

Congo

Total connections 10,990,451 % Growth in total connections p.a. 37.22% Prepaid as % of total connections 98.09% Market penetration 14.78%

25

Prepaid ARPU (USD/month) 4.85

Africa Prepaid Services

democratic republic of congo

• Operational changes over the past year:
• Extended Contractual arrangements with

V d DRC Vodacom DRC

• Focus on only:

V d i b lk i ti

• Vodoxi – bulk printing
• Public telephony

SIM t t k ith i t d

• SIM starter packs with no associated

distribution costs and on-going airtime revenues

• Airtime sales – subject to discount provided

and market conditions

26

Africa Prepaid Services

Ni i Nigeria

Total connections 82 525 542 Total connections 82,525,542 % Growth in total connections p.a. 55.93% Prepaid as % of total connections 98.48% Market penetration 45.11%

27

Prepaid ARPU (USD/month) 10.00

Africa Prepaid Services

nigeria

• Signed a contract with Multilinks Telkom to

exclusively provide all mobile distribution and value-added services on behalf of this and value added services on behalf of this CDMA operator in Nigeria

• APS Nigeria commenced trading in May

APS Nigeria commenced trading in May 2009

• May sales met expectations and

y p subsequent months have continued to yield similar results

28

Africa Prepaid Services

nigeria

• May sales were on track with budget and

Multilink-Telkom’s prior periods:

M 2009 th i i ti l A il

• May 2009 growth in airtime sales up on April

2009

• In excess of 50,000 new handset connected

In excess of 50,000 new handset connected in May

• Increased subscriber base with more

thl ti monthly connections

• Increased value-added services offered by

Multilinks Telkom to increase usage Multilinks-Telkom to increase usage patterns

29

Technology

Mark Levy Mark Levy Joint CEO

30

Activi

switching overview

POSTILION Switch Electricity Cellular Networks Vouchers (Ukash) Banking (TJ)

3rd Party Suppliers AEON Switch

3rd Party Host to Host

3rd Party Hosts

STD Accounting Interface D t b Accounting Package

AEON Merchant Terminal Management

Database

Terminals Vending/ Touch WEB Bulk Integrated

Management System & EVD

Terminals g Self Service Screen Browser Printing g 3rd Party

Retail devices

31

Services

EFT Switching Platform Core IT Infrastructure & Operational Platform Group MIS Pl tf & Operational Support EVD/VAS Platform MIS Platform (and Accounting / Financial Management) Card Management Platform (Gift Cards/ Factory Cards/ Loyalty) Device Deployment & Support

32

The Mobile Services Company

• MSC launched mibli™ in June ’08 – rapid growth

millions

• On-device portal to services, products & mobi-wallet
• Supported by MSC and Activi AEON back-end systems
• Launched MSC services for 3rd parties
• Launched key new products and services:
• Launched key new products and services:
• callink – low cost international calling
• moova – music and content subscription service
• mobi wallet – full-featured mobile wallet
• msc media – groupwide advertising sales
• Key drivers:
• Highly mobile-centric customers
• Demographics centered on young adults

g p y g

• Ownership of verticals & horizontals
• Integration of transactionality
• Economics of consumer spending patterns

Future:

• Future:
• International expansion of mibli™ user base
• Growth in MSC services to 3rd parties
• Expansion of subscription services
• Extension of mobi wallet services to 3rd parties
• Rapid enhancement of products & services on mibli™

33

Value Added Services

Mark Levy Joint CEO

34

Datacel

• Datacel continues to focus its strategy to

gy participate in the whole of the insurance value chain

• Velociti’s inbound call centre serviced in

excess of 500,000 customers

• The outbound direct selling has growth
• pportunity as companies develop more

products and services for the emerging products and services for the emerging income groups

35

Cellfind

• Location-Based Services (LBS)

( )

• Vodacom
• MTN
• WASP Services
• SMS, MMS, USSD
• Network billing etc.

g

• Key drivers:
• Network Operator performance & co-

marketing marketing

• Uptake of new MTN and Traffic services
• New Value-added LBS products
• Extended WASP service offerings
• Extended White label offerings
• Changes in Network Billing Rules

g g

• Changes in WASPA Code of Conduct

36

Cellfind

future

• Significant growth prospects for newly

launched MTN 2MyAid, MTN WhereRU and miTRAFFIC over the next 12 months

• White-Label offerings to be extended to:
• Music/Content
• Panic Buttons to Corporates
• Panic Buttons to Corporates
• Corporate offerings with lower churn

(Capitated Schemes) E i f B2C ff i l ti t

• Expansion of B2C offerings relating to:
• Traffic
• Weather
• Content
• LBS
• Look4info –corporate and consumer LBS-

based information service to be launched 2009

37

Content Connect Africa

• Digital and Mobile Content Distribution
• Dominant player for South African & African

independent music content K t t t f

• Key content aggregators for:
• MTN
• Vodacom
• Vodacom
• Future:
• Further integrated offerings with group subsidiaries.
• Expanded on-deck distribution into multiple African

territories

• Increased consumption of mobile content through

p g expanded group and 3rd party channels, e.g. mibli™ and the Mobile Services Company platform

38

Microsoft

• Past 18 months, working with Microsoft on the next generation
• f mobile services for the mass market.
• August 2009 – worldwide launch by Blue Label and Microsoft of

mibli™ v7 based on the Microsoft OneApp mobile software

• Integrated eco-system consisting of Blue Label’s

TRANSACTIONAL layer (Activi), Blue Label’s MOBILE SERVICES layer (MSC) and Microsoft’s OneApp on-phone software (owning the vertical), creating significant convergence

• Brings app-store functionality to the world’s phones

Brings app store functionality to the world s phones

• Ease of creating and deploying new applications (owning the

horizontal)

• Leverages massive Microsoft development community
• Allows cross-network transactionality
• Integrates entertainment & fun with utility, cost savings and

features never previously available in developing world markets

• Creates massive entrepreneurial and social upliftment
• pportunities
• Provides cost savings and features previously unavailable to

users users

• Plans to expand range and scope of services as well as into

new territories and existing user bases

39

Financial Overview

David Rivkind CFO

40

Financial highlights

Actual growth

Revenue R15.3bn 22% EBITDA R568m Operating profit R475m 73% 76% NPAT R391m 116% Core earnings R427m Headline earnings per share 51.63 cents 58% 71% Core earnings per share 55.93 cents 22% Cash generated from operations R667m Xx%

41

Financial overview

Income statement

31 May 2009 31 May 2008 Actual Core pro forma audited unaudited Growth audited unaudited Growth R’000 R’000

Revenue 15 281 449 12 930 609 18% Cost of inventories sold (14 215 840) (12 211 507) Gross profit 1 065 609 719 102 48% Gross profit % 6.97% 5.56% Other income 22 368 68 142 Overheads (519 910) (351 315) EBITDA 568 067 435 929 30% EBITDA % 3 72% 3 37% EBITDA % 3.72% 3.37% Depreciation, amortisation and impairment charges (93 220) (73 675) Operating profit 474 847 362 254 31% Net finance income 92 347 132 866 Finance income 205 046 239 470 Finance expense (112 699) (106 604) Net profit before taxation 567 194 495 120 Taxation (174 784) (138 929) Net profit after taxation 392 410 356 191 Share of loss of associates and joint ventures (27 445) (19 661) Share of loss of associates and joint ventures (27 445) (19 661) Minorities interest 25 582 (507) Net profit after taxation and minority interest 390 547 336 023 16% Amortisation on intangibles raised through business combinations net of tax 36 653 34 919 Core net profit after taxation 427 200 370 942 15% Earnings per share for profit attributable to equity holders (cents)

• Basic

51.13 43.85 17%

• Headline

51.63 43.55 19%

42

Financial Overview

segmental profile

• South African distribution
• International distribution
• Value added services
• Technology

Technology

Financial overview

Income statement

31 May 2009 31 May 2008 Actual Core pro forma audited unaudited Growth

Revenue 15 281 449 12 930 609 18% Cost of inventories sold (14 215 840) (12 211 507) Gross profit 1 065 609 719 102 48%

audited unaudited Growth R’000 R’000

Segmental revenue Gross profit % 6.97% 5.56% Other income 22 368 68 142 Overheads (519 910) (351 315) EBITDA 568 067 435 929 30% EBITDA % 3 72% 3 37% South African distribution 14 199 031 12 194 815 16.4% International distribution 724 163 500 268 44.8% Value added services 335 743 207 676 61.7% EBITDA % 3.72% 3.37% Depreciation, amortisation and impairment charges (93 220) (73 675) Operating profit 474 847 362 254 31% Net finance income 92 347 132 866 Finance income 205 046 239 470 Technology 22 512 27 850 (19.2%) Total 15 281 449 12 930 609 18.2% % Contribution % Contribution Finance expense (112 699) (106 604) Net profit before taxation 567 194 495 120 Taxation (174 784) (138 929) Net profit after taxation 392 410 356 191 Share of loss of associates and joint ventures (27 445) (19 661) % Contribution % Contribution South African distribution 92.9% 94.3% International distribution 4.8% 3.9% Value added services 2 2% 1 6% Share of loss of associates and joint ventures (27 445) (19 661) Minorities interest 25 582 (507) Net profit after taxation and minority interest 390 547 336 023 16% Amortisation on intangibles raised through business combinations net of tax 36 653 34 919 Core net profit after taxation 427 200 370 942 15% Value added services 2.2% 1.6% Technology 0.1% 0.2% Total 100% 100% Earnings per share for profit attributable to equity holders (cents)

• Basic

51.13 43.85 17%

• Headline

51.63 43.55 19%

44

Financial overview

Income statement

31 May 2009 31 May 2008 Actual Core pro forma audited unaudited Growth

Revenue 15 281 449 12 930 609 18% Cost of inventories sold (14 215 840) (12 211 507) Gross profit 1 065 609 719 102 48%

audited unaudited Growth R’000 R’000

Gross profit % 6.97% 5.56% Other income 22 368 68 142 Overheads (519 910) (351 315) EBITDA 568 067 435 929 30% EBITDA % 3 72% 3 37% Segmental gross profit EBITDA % 3.72% 3.37% Depreciation, amortisation and impairment charges (93 220) (73 675) Operating profit 474 847 362 254 31% Net finance income 92 347 132 866 Finance income 205 046 239 470 South African distribution 813 590 545 771 International distribution 75 488 63 441 Value added services 160 903 92 108 Technology 15 628 17 782 Finance expense (112 699) (106 604) Net profit before taxation 567 194 495 120 Taxation (174 784) (138 929) Net profit after taxation 392 410 356 191 11% Share of loss of associates and joint ventures (27 445) (19 661) Total 1 065 609 719 102 Gross profit % Gross profit % Share of loss of associates and joint ventures (27 445) (19 661) Minorities interest 25 582 (507) Net profit after taxation and minority interest 390 547 336 023 16% Amortisation on intangibles raised through business combinations net of tax 36 653 34 919 Core net profit after taxation 427 200 370 942 15% South African distribution 5.73% 4.48% International distribution 10.41% 12.68% Value added services 47.92% 44.35% Technology 69.43% 63.85% Earnings per share for profit attributable to equity holders (cents)

• Basic

51.13 43.85 17%

• Headline

51.63 43.55 19% Total 6.97% 5.56%

45

Financial overview

Income statement

31 May 2009 31 May 2008 Actual Core pro forma audited unaudited Growth

Revenue 15 281 449 12 930 609 18% Cost of inventories sold (14 215 840) (12 211 507) Gross profit 1 065 609 719 102 48% Segmental EBITDA margins EBITDA margin % South African distribution 4.40% 3.50% International distribution 0.85% 4.37%

audited unaudited Growth R’000 R’000

Gross profit % 6.97% 5.56% Other income 22 368 68 142 Overheads (519 910) (351 315) EBITDA 568 067 435 929 30% EBITDA % 3 72% 3 37% Value added services 22.41% 22.70% Total trading operations 4.63% 3.84% EBITDA % 3.72% 3.37% Depreciation, amortisation and impairment charges (93 220) (73 675) Operating profit 474 847 362 254 31% Net finance income 92 347 132 866 Finance income 205 046 239 470 Segmental EBITDA South African distribution 624 346 426 245 47% Finance expense (112 699) (106 604) Net profit before taxation 567 194 495 120 Taxation (174 784) (138 929) Net profit after taxation 392 410 356 191 Share of loss of associates and joint ventures (27 445) (19 661) South African distribution 624 346 426 245 47% International distribution 6 144 21 873 (72%) Value added services 75 239 46 866 61% Total trading operations 705 729 494 984 43% Technology (48 502) (9 929) Share of loss of associates and joint ventures (27 445) (19 661) Minorities interest 25 582 (507) Net profit after taxation and minority interest 390 547 336 023 16% Amortisation on intangibles raised through business combinations net of tax 36 653 34 919 Core net profit after taxation 427 200 370 942 15% Technology (48 502) (9 929) Corporate (89 160) (49 126) Total support (137 662) (59 055) Total 568 067 435 929 30% Earnings per share for profit attributable to equity holders (cents)

• Basic

51.13 43.85 17%

• Headline

51.63 43.55 19%

46

Financial overview

Income statement

31 May 2009 31 May 2008 Actual Core pro forma audited unaudited Growth

Revenue 15 281 449 12 930 609 18% Cost of inventories sold (14 215 840) (12 211 507) Gross profit 1 065 609 719 102 48%

audited unaudited Growth R’000 R’000

Gross profit % 6.97% 5.56% Other income 22 368 68 142 Overheads (519 910) (351 315) EBITDA 568 067 435 929 30% EBITDA % 3 72% 3 37% EBITDA % 3.72% 3.37% Depreciation, amortisation and impairment charges (93 220) (73 675) Operating profit 474 847 362 254 31% Net finance income 92 347 132 866 Finance income 205 046 239 470 Finance expense (112 699) (106 604) Net profit before taxation 567 194 495 120 Taxation (174 784) (138 929) Net profit after taxation 392 410 356 191 Share of loss of associates and joint ventures (27 445) (19 661)

• The group earned finance income of R205m

I t d i t t i bl d bt b l R47 (R16 i i i d) Share of loss of associates and joint ventures (27 445) (19 661) Minorities interest 25 582 (507) Net profit after taxation and minority interest 390 547 336 023 16% Amortisation on intangibles raised through business combinations net of tax 36 653 34 919 Core net profit after taxation 427 200 370 942 15%

• Imputed interest receivable on debtors balances – R47m (R16m in prior period)
• Interest on liquid working capital – R158m
• Decline in finance income of R65m net of this IFRS adjustment due to:
• Cash resources utilised to gain early settlement discounts

Earnings per share for profit attributable to equity holders (cents)

• Basic

51.13 43.85 17%

• Headline

51.63 43.55 19%

• Interest forfeiture due to acquisitions
• Gradual decline in interest rates.

47

Financial overview

Income statement

31 May 2009 31 May 2008 Actual Core pro forma audited unaudited Growth

Revenue 15 281 449 12 930 609 18% Cost of inventories sold (14 215 840) (12 211 507) Gross profit 1 065 609 719 102 48%

audited unaudited Growth R’000 R’000

Gross profit % 6.97% 5.56% Other income 22 368 68 142 Overheads (519 910) (351 315) EBITDA 568 067 435 929 30% EBITDA % 3 72% 3 37% EBITDA % 3.72% 3.37% Depreciation, amortisation and impairment charges (93 220) (73 675) Operating profit 474 847 362 254 31% Net finance income 92 347 132 866 Finance income 205 046 239 470 Finance expense (112 699) (106 604) Net profit before taxation 567 194 495 120 Taxation (174 784) (138 929) Net profit after taxation 392 410 356 191 Share of loss of associates and joint ventures (27 445) (19 661)

• R108m relates to imputed interest payable on creditors’ balances in terms of IFRS (R101m in prior period)

Share of loss of associates and joint ventures (27 445) (19 661) Minorities interest 25 582 (507) Net profit after taxation and minority interest 390 547 336 023 16% Amortisation on intangibles raised through business combinations net of tax 36 653 34 919 Core net profit after taxation 427 200 370 942 15% Earnings per share for profit attributable to equity holders (cents)

• Basic

51.13 43.85 17%

• Headline

51.63 43.55 19%

48

Financial overview

Income statement

31 May 2009 31 May 2008 Actual Core pro forma audited unaudited Growth

Revenue 15 281 449 12 930 609 18% Cost of inventories sold (14 215 840) (12 211 507) Gross profit 1 065 609 719 102 48%

audited unaudited Growth R’000 R’000

Gross profit % 6.97% 5.56% Other income 22 368 68 142 Overheads (519 910) (351 315) EBITDA 568 067 435 929 30% EBITDA % 3 72% 3 37%

• Oxigen Services India
• Revenue increased by 31% from R1.02bn to R1.34bn.

EBITDA % 3.72% 3.37% Depreciation, amortisation and impairment charges (93 220) (73 675) Operating profit 474 847 362 254 31% Net finance income 92 347 132 866 Finance income 205 046 239 470 Revenue increased by 31% from R1.02bn to R1.34bn.

• Improvement in company’s performance in the last quarter
• Ukash
• Purchased for strategic reasons – technology offering in line with group’s objective to increase value added services

Finance expense (112 699) (106 604) Net profit before taxation 567 194 495 120 Taxation (174 784) (138 929) Net profit after taxation 392 410 356 191 Share of loss of associates and joint ventures (27 445) (19 661)

• Purchased for strategic reasons

technology offering in line with group s objective to increase value added services Share of loss of associates and joint ventures (27 445) (19 661) Minorities interest 25 582 (507) Net profit after taxation and minority interest 390 547 336 023 16% Amortisation on intangibles raised through business combinations net of tax 36 653 34 919 Core net profit after taxation 427 200 370 942 15% Oxigen Services India Pvt Ltd (25 940) (19 661) (32%) Smart Voucher Limited (Ukash) (2 286)

• Other

781

• Earnings per share for profit attributable to equity holders (cents)
• Basic

51.13 43.85 17%

• Headline

51.63 43.55 19% Total (27 445) (19 661) (40%)

49

Financial overview

Income statement

31 May 2009 31 May 2008 Actual Core pro forma audited unaudited Growth

Revenue 15 281 449 12 930 609 18% Cost of inventories sold (14 215 840) (12 211 507) Gross profit 1 065 609 719 102 48%

audited unaudited Growth R’000 R’000

Core net profit Gross profit % 6.97% 5.56% 25% Other income 22 368 68 142 Overheads (519 910) (351 315) EBITDA 568 067 435 929 30% EBITDA % 3 72% 3 37% 10% South African distribution 537 815 407 320 130 495 International distribution 17 279 10 601 6 678 International distribution associates (28 226) (19 661) (8 565) EBITDA % 3.72% 3.37% 10% Depreciation, amortisation and impairment charges (93 220) (73 675) Operating profit 474 847 362 254 31% Net finance income 92 347 132 866 Finance income 205 046 239 470 Value added services 49 497 33 450 16 047 Total operations 576 365 431 710 144 655 Technology (55 250) (11 339) (43 911) Finance expense (112 699) (106 604) Net profit before taxation 567 194 495 120 Taxation (174 784) (138 929) Net profit after taxation 392 410 356 191 11% Share of loss of associates and joint ventures (27 445) (19 661) Corporate (93 915) (49 429) (44 486) Total support (149 165) (60 768) (88 397) Total 427 200 370 942 56 258 C i h 55 93 48 40 7 53 Share of loss of associates and joint ventures (27 445) (19 661) Minorities interest 25 582 (507) Net profit after taxation and minority interest 390 547 336 023 16% Amortisation on intangibles raised through business combinations net of tax 36 653 34 919 Core net profit after taxation 427 200 370 942 15% Core earnings per share 55.93c 48.40c 7.53c Earnings per share for profit attributable to equity holders (cents)

• Basic

51.13 43.85 17%

• Headline

51.63 43.55 19%

50

Financial overview

Balance sheet

31 May 2009 31 May 2008 audited audited R’000 R’000

ASSETS Non-current assets (2) 736 634 712 759

R’000 R’000

1. Total assets

• Increased by R658m (20.4%) to

Property, plant and equipment 105 011 69 484 Intangible assets and goodwill 460 325 489 786 Investments in associates and joint ventures 109 837 81 356 R3.9bn. 2. Non-current assets

• Increased by R24m
• PPE - Capex mainly on POS

Financial assets at amortised cost 54 096 72 133 Deferred taxation assets 7 365

• Current assets (3)

3 143 109 2 509 470 p y devices

• Amortisation of intangibles assets
• Net increase in investment in

associates - Ukash and Oxigen Financial assets at fair value 10 5 672 Financial assets at amortised cost 67 449 53 163 Inventories 384 361 484 501 L i bl 29 920 7 103 India.

• Net decrease in unactivated starter

packs (Financial assets at amortised cost) 3 C t t Loans receivable 29 920 7 103 Trade and other receivables 898 571 630 687 Current tax assets 2 101

• C

h d h i l t 1 760 697 1 328 344 3. Current assets

• Increased by R633m
• Increase in cash resources
• Stock turn averaged 3 times

Cash and cash equivalents 1 760 697 1 328 344 Total assets (1) 3 879 743 3 222 229

• Debtors collection – 21 days

51

Financial overview

Balance sheet

31 May 2009 31 May 2008 audited audited R’000 R’000

EQUITY AND LIABILITIES Capital and reserves 2 244 120 1 917 944 Sh it l h i d t h

(1)

4 379 175 4 404 737 1. Share capital, share premium and treasury shares T h h d f

R’000 R’000

Share capital, share premium and treasury shares (1) 4 379 175 4 404 737 Restructuring reserve (1 843 912) (1 843 912) FCTR (13 399) 2 552 Transaction with minority reserve (2) (914 399) (898 564)

• Treasury shares purchased for

share plan. 2. Transaction with minority reserve G d ill i i t ti y ( ) ( ) Share-based payment reserve (3) 10 602

• Minority interest

(9 252) 8 373 Retained earnings 635 305 244 758

• Goodwill arising on transactions

with minorities in terms of the economic entity method 3. Share based payment reserve Non-current liabilities 69 664 58 056 Current liabilities 1 565 959 1 246 229 Trade and other payables 1 518 853 1 152 969 Non interest bearing borro ings 9 041

• Cost to date of the group’s share

plan awards 4. Total liabilities Non-interest bearing borrowings

• 9 041

Current tax liabilities 28 039 71 146 Bank overdraft 3 891 50 Interest bearing borrowings 15 176 13 023

• Increased by R331m
• Creditor payment terms – 40 days

g g Total liabilities (4) 1 635 623 1 304 285 Total equity and liabilities 3 879 743 3 222 229

52

Financial overview

Cash flow

31 May 2009 audited R’000

1. Cash flows from operating activities

R’000

Cash flows from operating activities (1) 666 994 C h fl f i ti ti iti

(2)

(206 731)

• Profit growth + working capital

management = R667m of operating cash generated Cash flows from investing activities (2) (206 731) Cash flows from financing activities (10 624) Increase in cash and cash equivalents 449 639 2. Cash flows from investing activities

• Acquisition of group companies

Cash and cash equivalents at the beginning of the period 1 328 294 Translation difference (21 127)

• Acquisition of group companies –

R102m

• Capex – R74m
• Additions to intangible assets –

R29 Cash and cash equivalents at end of period 1 756 806 R29m

53

Financial overview

Dividends

No dividend has been declared in line with group’s present stated policy The group intends to declare dividends in the financial year commencing 1 June 2010

54

South African Distribution

Brett Levy Joint CEO

55

South African Distribution

South Af i Africa

Total connections 50,019,000 % Growth in total connections 14.06% Prepaid as % of total connections 86.37% Market penetration 97.66% p Prepaid ARPU (USD/month) 8.50

56

RICA

• Onus on all South Africa’s

telecommunications operators and retailers to gather and register personal details of all South African existing and new mobile South African, existing and new, mobile phone subscribers

• BLT has formulated to RICA registration

t t th t i bl t i t id strategy that is able to register prepaid mobile phone subscribers in support of our retail customers, nationally

• In conjunction with the South African Mobile
• perators, we have a number of RICA data

collection solutions that will seamlessly collection solutions that will seamlessly integrate into the current store setups, with minimal impact on hardware, software and IT t IT systems

57

Algoa Bus Ticketing

• A new cashless bus ticket system was

introduced in Nelson Mandela Bay at the beginning of August 2009 beginning of August 2009

• Allows consumers to travel a set route as

many times as they like in a day, week or many times as they like in a day, week or month using the same pass

• Bus vouchers are available at 600 outlets

58

Remittances

• Currently 2 million (60%) migrant workers,

sending R6.1 billion across continent

• 5.7 million South Africans live away from

5.7 million South Africans live away from immediate family

• Total domestic market is R12 billion

annually annually

• 60% of remittances reach their beneficiaries

in informal ways due to high transactional fees fees

• Remittances are recognised as one of the

world’s largest poverty reduction efforts W ld id 150 illi i t t

• Worldwide 150 million migrants sent

US$300 billion in 2006

• Remittance pathways increase education

d d d hild l b spend and reduce child labour

59

Remittances

• Influencing factors to consider:
• Ease

Familiarity

• Familiarity
• Cost
• Speed
• Risk tolerance
• Access
• Existing remittance channels:

Existing remittance channels:

• Taxi driver
• Friend or relative
• Post office
• In many African countries, remittance flows

are large enough to rival aid flows g g

60

Gidani

• In 2006, the National Lottery Board awarded Gidani

a tender to manage the running of South Africa’s a tender to manage the running of South Africa s National Lottery

• In December 2006, Gidani appointed Activi to assist

it with the rollout and maintenance of new Lotto hi S th Af i machines across South Africa

• In July 2009, Gidani announced that lottery players

will be able to play Lotto through a cell phone, bank ATM and online banking

• The first time in Africa – made possible by Activi’s

technology platform

• The new method of playing Lotto was launched

th h FNB through FNB

• Other banks have indicated that they will come on

board later in the year

• Access to nearly one million FNB mobile banking

Access to nearly one million FNB mobile banking customers, as well as registered users and 3 400 FNB ATM’s

• Shoprite pilot brings Lotto to till points, also off

Activi’s technology platform (mid August) Activi s technology platform (mid-August)

• The first time in Africa

61

Blue Label Telecoms : SA Distribution

Period : 1 June 2008 31 May 2009

Total Prepaid Product Revenue & Voucher Counts

Period : 1 June 2008 - 31 May 2009

122,500,000 140,000,000 R 1,400,000,000 R 1,600,000,000 87,500,000 105,000,000 R 1,000,000,000 R 1,200,000,000 nt VAT 52 500 000 70,000,000 R 600 000 000 R 800,000,000 Voucher Coun Revenue Excl. V 35,000,000 52,500,000 R 400,000,000 R 600,000,000 R 17,500,000 R 0 R 200,000,000 200806 200807 200808 200809 200810 200811 200812 200901 200902 200903 200904 200905 Sales Excl. VAT Voucher Count

(Crown Cellular, Kwikpay, Matragon, The Prepaid Company, Ventury, Virtual Voucher)

Blue Label Telecoms : SA Distribution

Period : 1 June 2008 31 May 2009

Device Split May 2009 Devices GIS Regional Spread May 2009

Period : 1 June 2008 - 31 May 2009

Terminals 68.93% Free State 7.14%

2009

Eastern Cape 12.97% Gauteng 35.09% Kwazulu Natal 12.39% Bulk Printing Units Gateway Units Integrated Kiosk Units 2.87% Touch Screen Units Vending Machine 6.58% Limpopo 3.62% Mpumalanga 4 47% North West Northern Cape 1.75% Western Cape 18 11% 0.48% y 1.42% g Point Sale Devices 11.46% Units 8.26% 4.47% 4.47% 18.11%

(Kwikpay, Matragon, Ventury, Virtual Voucher)

Blue Label Telecoms : SA Electronic Distribution

Period : 1 June 2008 31 May 2009

Revenue by Market Segment

Period : 1 June 2008 - 31 May 2009

R 32,000,000 R 36,000,000 R 230,000,000 R 260,000,000 R 24,000,000 R 28,000,000 R 170,000,000 R 200,000,000 e - M6 2, M3, M4 R 16,000,000 R 20,000,000 R 110,000,000 R 140,000,000 Revenue Revenue - M2 R 12,000,000 R 16,000,000 R 80,000,000 R 110,000,000 R 8,000,000 R 50,000,000 M2 - Petrolum Industry M3 - Independent Multi Lane Retailer M4 - Independent Single Lane Retailer M6 - 2nd Tier Wholesalers

(Kwikpay, Matragon, Ventury, Virtual Voucher)

Blue Label Telecoms : SA Distribution

Period : 1 June 2008 31 May 2009

250.00%

Period : 1 June 2008 - 31 May 2009

201.73% 206.96% 200.00% 150.00% 100.00% 24.21% 21.82% 22.28% 22.31% 26.62% 0 40% 6.26% 7.75% 50.00% 37 20% 36 97% 0.40% 0.00% Telkom Electricity Cell C MTN Vodacom Overall Growth

• 37.20%-36.97%
• 50.00%

Voucher Count Growth % PT Sales Excl. VAT Growth % PT

(Crown Cellular, Kwikpay, Matragon, The Prepaid Company, Ventury, Virtual Voucher)

Blue Label Telecoms : SA Electronic Distribution

Period : 1 June 2008 31 May 2009

Growth % per Region: June 2008 vs May 2009

Period : 1 June 2008 - 31 May 2009

167.61% 160.00% 180.00% 124.01% 120.00% 140.00% 61.19% 85.09% 82.30% 91.39% 78.95% 80.00% 100.00% 52.69% 51.85% 50.71% 27.38% 51.69% 28.93% 27.94% 36.05% 34.96% 22.82% 19.48% 39.50% 40.00% 60.00% 15.45% 19.48% 0.00% 20.00% Eastern Cape Free State Gauteng Kwa Zulu Natal Limpopo Mpumalanga North West Northern Cape Western Cape Overall Growth Cape Natal Cape Cape Growth Voucher Count Growth % Sales Excl. VAT Growth %

(Kwikpay, Matragon, Ventury, Virtual Voucher)

Blue Label Telecoms : SA Distribution

Monthly Sales by Region

R 160 000 000 R 180,000,000 R 200,000,000 R 80 000 000 R 90,000,000 R 100,000,000 al, Limpopo, ern Cape R 120,000,000 R 140,000,000 R 160,000,000 R 60,000,000 R 70,000,000 R 80,000,000 auteng Kwa-Zulu Nata Cape and Weste R 80,000,000 R 100,000,000 R 40,000,000 R 50,000,000

• nthly Sales Ga

pe,Free State, est, Northern C R 40,000,000 R 60,000,000 R 20,000,000 R 30,000,000 Mo es Eastern Cap anga, North We R 0 R 20,000,000 R 0 R 10,000,000 200806 200807 200808 200809 200810 200811 200812 200901 200902 200903 200904 200905 Monthly Sal Mpumala Eastern Cape Free State Kwa Zulu Natal Limpopo Mpumalanga North West Northern Cape Western Cape Gauteng

Blue Label Telecoms Blue Label Telecoms

Final Results Presentation Thank you y Q&A