MTN : FY 23 results SENS

Annual financial results

for the year ended 31 December 2023

* Constant currency information after accounting for the impact of the pro forma adjustments as defined and included throughout these Annual Financial Results.

Any forward-looking financial information disclosed in these Annual Financial Results including the dividend guidance, has not been reviewed or audited or otherwise reported on by our external auditor.

Certain information presented in these Annual Financial Results, including constant currency financial information, constitutes pro forma financial information. The responsibility for preparing and presenting the pro forma financial information as well as the completeness and accuracy of such information is that of the directors of the Company. This is presented for illustrative purposes only. Because of its nature, the pro forma financial information may not fairly present MTN's financial position, changes in equity, and results of operations or cash flows. The pro forma financial information and selected constant currency financial information contained in these Annual Financial Results has been reported on by the Group's auditor (Ernst & Young Inc) who has issued auditor's assurance reports thereon and their unmodified auditor's assurance reports prepared in terms of ISAE 3420 are available for inspection upon request to Investor.Relations@mtn.comat the Company's registered office.

The pro forma financial information presented in the Annual Financial Results for the period ended 31 December 2023, and the comparable period has been prepared excluding the impact of impairment of goodwill, PPE, and associates, impairment loss on remeasurement of disposal group, net loss (after tax) on disposal of SA towers, profit or loss on disposal of PPE and intangible assets, hyperinflation (excluding impairments), impact of foreign exchange losses and gains, IFRS 2 Charge due to Ghana localisation, Disinvestments, Deferred tax asset remeasurement in Mauritius and other non- operational items (collectively the "Pro forma adjustments") and constitutes pro forma financial information to the extent that it is not extracted from the segmental information included in the audited consolidated annual financial statements for the year ended 31 December 2023. This pro forma financial information has been presented to eliminate the impact ofthe pro forma adjustments from the consolidated results for the year ended 31 December 2023 to achieve a comparable year-on-year (YoY) analysis. The pro forma adjustments have been calculated in terms of the Group accounting policies disclosed in the consolidated financial statements for the year ended 31 December 2023. Refer to page 32 for more information.

Constant currency information has been presented to remove the impact of movement in currency rates on the Group's results and has been calculated by translating the prior financial reporting period's results at the current period's average rates. The measurement has been performed for each of the Group's currencies, materially being that of the US dollar and Nigerian naira. The constant currency growth percentage has been calculated based on the prior period constant currency results compared to the current year results. In addition, in respect of MTN Irancell, MTN Sudan and MTN South Sudan the constant currency information has been prepared excluding the impact of hyperinflation. The economies of Sudan, South Sudan and Iran were assessed to be hyperinflationary for the period under review and hyperinflation accounting was applied.

MTN's independent external auditor, Ernst & Young Inc., has audited the Group's summarised and the annual financial statements. The independent auditor's audit reports by Ernst & Young Inc. do not report on all of the information contained in these financial results. Shareholders are therefore advised that in order to obtain a full understanding of the nature of the independent auditor's engagement they should obtain a copy of the unqualified independent auditor's audit reports on the summary Group financial statements and the Group annual financial statements together with the accompanying financial information by sending a request toInvestor.Relations@mtn.comat MTN's registered office and on the Company's websitewww.mtn.com

The directors of MTN take full responsibility for the preparation of these Annual Financial Results and ensuring that the financial information has been correctly extracted from the underlying audited financial statements.

Results overview

for the year ended 31 December 2023

Highlights

Total subscribers

up by 2.0% to 294.8m

Active data subscribers up by 9.3% to 149.7m

Active Mobile Money (MoMo) monthly active users (MAU) up by 5.0% to 72.5m

Data traffic

MoMo value of transactions up by 47.4%* to

up by 25.8% (up 35.4% ex-JVs)

US$272.1bn

Group service revenue grew by 6.9% (13.5%*) to R210.1bn

Group data revenue grew by 14.0% (23.0%*) to R84.0bn

Group fintech revenue grew by 21.4% (21.8%*) to R21.0bnCapex ofReported headline earnings per share (HEPS)R63.6bn including IFRS 16 leases

down by 72.3% to 315cps

Adjusted HEPS down by 9.5% to 1 203cps

(R41.1bn ex-leases, with capex intensity of 18.6%)

Return on equity (ROE) improved by 0.2pp to 24.4%

Holdco leverage increased to 1.4x

(December 2022: 0.8x)

Full year dividend of 330cps for FY 2023

Holdco net debt up to

R31.9bn

(December 2022: R28.4bn)

MTN is a pan-African mobile operator with the strategic intent of

'Leading digital solutions for Africa's progress'.

We have 295 million customers in 19 markets and are inspired by our belief that everyone deserves the benefits of a modern connected life.

* Constant currency information after accounting for the impact of the pro forma adjustments as defined and included throughout these summarised audited Group financial statements.

Any forward-looking financial information disclosed in this results announcement, including the dividend guidance, is the directors' responsibility and has not been reviewed or audited or otherwise reported on by our external joint auditors

Highlights

% change

Rm

FY 2023

FY 22

% change reportedcurrency

Group service revenue - South Africa - Nigeria^

210 139

41 882

196 493 40 848

6.9 13.52.5 2.5

1.5 11.4

2.2 2.2

73 853

77 023 (4.1) 22.1

(28.7) 25.0

Group EBITDA˜ (before once-off items)

90 350

90 814

- South Africa# - Nigeria^

18 623

19 480

(0.5) 9.8(4.4) (4.4)

(10.7) 5.1

(0.4) (0.4)

36 916

41 087 (10.2) 14.2

(42.3) 1.1

Group EBITDA margin - South Africa# - Nigeria^

40.9% 35.9% 49.7%

• 43.9% (3.0 pp)

• 38.5% (2.6 pp)

• 53.1% (3.4 pp)

(1.2 pp)(2.6pp)(3.6 pp)

(4.9pp) (2.1pp)

(1.0pp) (1.0pp)

(10.0pp) (10.0pp)

˜ Group earnings before interest, tax, depreciation and amortisation. # Excludes tower sale gain.

^ MTN Nigeria performance impacted material naira devaluation from June 2024.

Unless otherwise stated, financial and non-financial growth rates are presented on a constant currency basis and are year-on-year (YoY, 12M to December 2023 versus 12M to December 2022).

Service revenue excludes device and SIM card revenue. Data revenue is mobile and fixed access data and excludes roaming and wholesale. Fintech includes MoMo, insurance, airtime lending and e-commerce. Active data users are a count of all subscribers at a point in time who had a revenue-generating event in the specified period (90 days) prior to that point in time and during the past 30 days had data usage greater than or equal to five megabytes. MoMo users are 30-day active users.

Results overview

Group President and CEO Ralph Mupita comments:

Resilient operating result amid macroeconomic and geopolitical challenges

"The MTN Group sustained a resilient performance in 2023, with solid underlying operating momentum and pleasing progress in our key strategic initiatives during a period characterised by geopolitical and macroeconomic headwinds. The sharp devaluation of the Naira during the period impacted our reported results for both MTN Nigeria and MTN Group. We continued to invest in our business and execute on our Ambition 2025 strategy given the sustained structural high demand for data and fintech services evident across our markets. Data traffic across our operations grew at 26.3% (35.4% excluding JVs) while fintech transaction volumes grew at 32.2% in the period.

Solid operational execution and performance

We deployed R41.1 billion of capex (ex-leases) to support the focused execution of our Ambition 2025 strategy. The progress of MTN South Africa's (MTN SA) network resilience plan was a key success in the year, which significantly improved network availability and supported commercial initiatives, despite ongoing loadshedding. By the close of 2023, MTN SA had achieved network availability of approximately 95% ahead of schedule, with availability of approximately 98% on the cohort of sites where resilience investment had been completed.

More broadly, the business' customer base was resilient ending 2023 at 295 million (up 2.0%), despite the adverse effects of SIM registration regulations in key markets, supporting robust service revenue growth of 13.5%*.

In terms of service revenue growth in our larger markets, MTN Nigeria was up by 22.1%*, MTN South Africa (MTN SA) by 2.5% and MTN Ghana by 35.0%*. Adjusting for conflict-affected MTN Sudan, the Group's service revenue growth for 2023 would have been 14.1%*.

"MTN delivered a solid operating and financial performance in 2023, as we continued to execute on our Ambition 2025 strategy. We are pleased with the business' continued resilience under challenging global and regional macroeconomic conditions."

Ralph Mupita

Group President and CEO

Active data customers increased by 9.3% to 149.7 million, with data traffic up by 26.3% (up 35.4% excluding JVs). MoMo active users increased by 5.0% to 72.5 million, impacted by a strategic shift in focus to wallet customers in Nigeria and base clean ups in Côte d'Ivoire and South Africa. The momentum in volume and value of MoMo transactions remained strong and were up by 32.2% and 47.4%*, respectively. This underpinned strong advanced service revenue growth of 54.8%*.

Group EBITDA increased by 9.8%* YoY. The EBITDA margin of 41.5%* (2022: 42.7%*), was affected largely by higher inflation and the effects of foreign currency devaluations. The extent of these impacts were moderated through delivery of our expense efficiency programme, which realised savings of R2.6 billion for the year - exceeding our 2023 target of R1.5 billion.

The Group's financial results were impacted by restatements and the revision of unrealised forex losses in MTN Nigeria's results, the effects of which are outlined on page 9.

Healthy balance sheet and liquidity positions

As of 31 December 2023, the Group's net-debt-to-EBITDA ratio of 0.4x (31 December 2022: 0.3x) was comfortably within our targeted loan covenant level. Our net interest cover of 6.4x was also within covenant thresholds. Holding Company (Holdco) leverage held firm and within guidance at 1.4x (December 2022: 0.8x), supported by R13.4 billion in cash upstreamed from operations over the year, of which R5.4 billion was in Q4. Our Holdco leverage ratio was impacted by depreciation of the rand against the US dollar in 2023 as well as our election of the scrip dividend options from MTN Nigeria and MTN Ghana for the FY 2022 dividends given paucity of foreign currency in those market.

We raised a total of R24 billion in Holdco loan facilities in the year, which were deployed to refinance maturing debt, manage the debt maturity profile and bolster Holdco liquidity. The funding was raised under the DMTNprogramme, local banks and international bank markets. In line with MTN's strategy to deleverage non-rand debt at the Holdco, we were pleased to have early redeemed a total of US$353 million of the MTN 2024 Eurobonds during FY 2023 through a cash tender offer. This brought the total amount of 2024 Eurobonds redeemed to US$1.2 billion to date. Our Holdco debt currency mix ratio (US$:ZAR) improved to 23:77, well within our medium-term objective of maintaining foreign currency denominated debt to below 40%.

We ended the 2023 financial year with a healthy Holdco liquidity position of R44.1 billion in cash and committed facilities.

Ambition 2025 execution

On 5 February 2024, we announced that MTN and Mastercard signed definitive agreements with Mastercard for a minority investment of up to US$200 million into MTN Group Fintech at a valuation of US$5.2 billion on a cash and debt-free basis. The transaction was originally announced on 14 August 2023 and is subject to customary closing conditions. We are excited about this partnership, particularly the commercial agreements, which we expect to support the accelerated growth of our fintech business within payments, e-commerce and remittances.

We have also advanced our work to structurally separate the fibre business, with the engagements to secure regulatory clearances in key markets being the main priority. Bayobab also acquired the fibre network of MTN Zambia in a sale-and-lease back transaction and added new fibre operating licences in Uganda, Côte d'Ivoire and Central African Republic.

On 21 February 2024, all the conditions precedent were finalised in relation to MTN's sale of 100% of the shares in MTN Afghanistan to Investcom AF Limited (Investcom AF) and accordingly, the sale has now been completed. The exit from Afghanistan completes the phase of our Middle East exit of our previously consolidated subsidiaries in that region.

In December 2023, MTN also accepted an offer from Telecel for the acquisition of MTN's equity interests in MTN Guinea-Bissau and MTN Guinea-Conakry, in line with the portfolio optimisation focus within our Ambition 2025. The agreement remains subject to a number of conditions precedent.

We made good progress in advancing key environmental, social, and governance (ESG) initiatives and achieving our strategic goal of creating shared value - the pleasing strides we have made in this regard are captured on page 12. In terms of our eco-responsibility priorities, we achieved a 13.1% absolute reduction in Scope 1 and 2 emissions in 2023.

FY 2023 dividend declaration and

FY 2024 guidance

The Board declared a dividend of 330cps for FY 2023. For FY 2024, in line with our dividend policy and guided by our capital allocation framework, the Board anticipates paying a minimum ordinary final dividend of at least 330cps after the announcement of full year results in March 2025.

Outlook, priorities and medium-term guidance

Looking ahead, the near-term macro headwinds to our business remain, particularly naira volatility. More broadly across our markets, inflation rates and interest rates may stay elevated. Tariff increases for voice and data, will be required in the period ahead to mitigate network related expenses, and these will require regulatory approval across several markets. In this context we are focused on delivering on our medium-term guidance and continue executing on our strategic objectives.

Having achieved substantial progress on its network resilience programme, the focus for MTN SA will be to complete this work and accelerate the recovery of its topline and EBITDA margin to medium-term guidance ranges over time.

MTN Nigeria's near-term focus will be to drive margin recovery and strengthen its balance sheet given the sharp devaluation of the naira since June 2023. Engagements withregulatory authorities on much-needed tariff increases for the industry remain ongoing and a priority, and there is comprehensive work in progress to look at reducing and mitigating the foreign exchange exposures impacting its business, including tower operating costs.

MTN Ghana and MTN Uganda are leading the increased growth and contribution to Group of the Markets portfolio. These Opcos have reported strong FY 2023 results and are positioned to capture the growth opportunities in their respective markets.

We are excited about the outlook of our fintech business, having signed the definitive commercial and equity investment agreements with Mastercard. This positions the business well to scale faster and we are excited about the commercial launches of card issuance and acceptance across the footprint.

We maintain our overall medium-term guidance framework, however simplifying our objective for fintech. We revise this to a medium-term growth target (in constant currency) of 'high-20% to low-30%', from 'at least 20% of Group service revenue contribution by 2025'. Importantly, we are also maintaining our capital allocation framework to support the execution of our strategy and will continue to invest in the growth of our business with a capex (ex-leases) target of R35-39 billion for FY 2024, based on current currency assumptions.

As we continue to navigate the macro challenges in our trading environment in 2024, we reflect with both pride and humility on the progress of our business over the past 30 years. This has been powered by the dedication and resilience of our people, as well as the support of our customers and broader stakeholders. We will continue the focused execution of our strategy to drive growth and unlock value for all our stakeholders."

BUSINESS OVERVIEW

Operating context

The business weathered a challenging macroeconomic environment, with the blended rate of inflation across our markets remaining elevated, averaging 16.7% in 2023, from 15.1% in 2022. More encouragingly, inflation started to trend lower in H2 in key markets such as South Africa, Ghana and Uganda. Forex markets remained volatile, with limited availability of hard currency, especially in Nigeria. The US dollar appreciated by approximately 97%, on closing rates against the naira in 2023, resulting in material financial impacts on our business.

Our regulatory environments continued to evolve and have been well managed by the business. In particular, we have navigated the headwinds presented by SIM registration directives in some of our markets to ensure minimal impacts on service revenue.

The crisis in Sudan deepened, with the ongoing conflict resulting in fuel shortages, power outages and disruptions to network availability. MTN extends its deepest sympathies to those impacted by the nation's strife. More broadly, geopolitical volatility also had knock-on effects on our trading environments.

In this context, MTN produced a solid set of results in 2023, showcasing its ability to persevere and execute well in a demanding operating environment. Group service revenue grew 13.5%* to R210.1 billion (2022: R196.5 billion), supported by growth of 35.0%* in MTN Ghana, 22.1%*in MTN Nigeria and 2.5% in MTN SA. The healthy topline growth in regions such as SEA and WECA also contributed to the Group's solid overall result. MTN Sudan continues to trade in a particularly challenging context, given the ongoing conflict in the country, and saw a 12.3%* decline in service revenue. Excluding MTN Sudan, the Group service revenue would have increased by 14.1%.

Continued resilience in voice and structural growth in data

Voice revenue increased by 3.3%*, with growth in voice traffic of 17.5% YoY (excluding JVs). We continue to see the substitution of voice with data and are focused on the commercial execution of our CVM initiatives and driving growth through segmented customer propositions. Adjusting for MTN SA - a more mature voice market within the Group portfolio - overall voice revenue increased by 6.3%*.

Data revenue increased by 23.0%*, driven by growth in active data subscribers of 9.3% (10.2% excluding JVs) and an increase in data use of 15.6% to 8.60GB per user per month (22.9% to 6.10GB excluding JVs). In 2023, data traffic increased by 26.3% (35.4% excluding JVs), supported by the ongoing investments in our networks' capacity and quality.

The population covered by our 3G, 4G and 5G networks grew by 10.6 million, 32.3 million and 46.2 million respectively. We recorded 183.3 million smartphones on our network, representing 62.6% penetration of our customer base (2022: 57.5%).

SCALING OUR PLATFORMS

Building the largest and most valuable fintech platform

Fintech sustained a strong overall revenue growth trajectory, with an increase of 21.8%* YoY. The momentum in advanced services revenue (up 54.8%*) was particularly pleasing and increased its mix relative to basic services (up 21.2%*). The contribution of advanced services to total fintech revenue rose to 20.4% (up 4.4pp).

Active MoMo users increased by 5.0% to 72.5 million. Agents and merchants grew by 5.4% and 42.5% to 1.3 million and 2.1 million respectively. The development of our overall fintech ecosystem remained robust with a 32.2% increase in transaction volumes to 17.6 billion transactions, and transaction value up by 47.4%* to US$272.1 billion.

We renewed the scope of partnership with Ericsson for our core wallet platform to enable more focus on advance services product development. To support our priority to broaden the scope of financial inclusion users, we continue to work with Ericsson´s Converged Wallet (ECW) platform. This is accompanied by market proven specialised solutions in order to provide efficient, inclusive and functionally-rich user experience.

As certain of the costs from the partnership are capitalised, such as software licensing, this benefits EBITDA but resulted in higher capex in the year, as well as depreciation and interest expenses over the period of the agreement.

Key fintech markets

MTN Ghana's fintech revenue continued its accelerating growth trend and posted a YoY increase of 46.4%* driven by convenient and secure financial services delivered to its 15.2 million active users, which were up by 20.1% YoY (net additions of 2.5 million). Our partnerships in Ghana with various financial institutions, agents (229k) and merchants (168k) supported the expansion of the ecosystem, making it easier for customers to transact and save, as well as access micro-loans, micro-insurance and international remittances.

MTN Uganda's fintech revenue grew by 17.6%*, with strong growth in advanced service revenues as MoMo adoption continued to scale, especially MoMo Pay. Fintech subscribers increased by 10.5% YoY to 12.1 million (net additions of 1.2 million). Merchants increased by 68.7% to 292k. Advanced service revenue grew steadily as we introduced new international money transfer corridors to Asia and Europe.

In Nigeria, fintech revenue increased by 3.7%*, supported by the recovery in growth of active wallet users, up 163% to 5.3 million. This represented a strong acceleration in Q4, as the execution of our commercial strategy gained traction. The momentum in our broader ecosystem metrics was also healthy, in terms of which the active agent base expanded by 46.0% to 326k agents. Further, the active merchant base has built up to 324k merchants since June 2023 .

In other markets, the operating environments and performances in Zambia and Côte d'Ivoire remained challenging. Both markets have promising economic prospects and exciting growth opportunities - we are focused on positioning our fintech operations to unlocking the fintech opportunity. South Africa delivered a robust performance in FY 2023, underpinned by the growth in advance services from a nascent base.

Key fintech verticals

Our payments and e-commerce ecosystem grew strongly as we leveraged our consumer and merchant footprint. The total value of merchant payments made through MoMo rose by 46.1%* YoY to US$16.1 billion.

In BankTech, we facilitated a total loan value of US$1.9 billion up 66.0%* as we capitalised on our scaled mobile wallet business, rich data and customer footprint. Uganda and Ghana were the key drivers of performance with strong growth in loan users.

The total value of remittances grew by 44.4%* YoY to US$3.3 billion. This was driven by growth in the number of active corridors as well as focused marketing awareness

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MTN Group Ltd. published this content on 25 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 March 2024 05:24:01 UTC.