Airtel Africa Plc (AAF) Earnings Call Transcript & Summary

Ladies and gentlemen, I would like to welcome you to the Fifth Annual General Meeting of Airtel Africa Plc. I am Sunil Bharti Mittal, the Chair of the Board, and I'll be chairing our meeting today. According to our attendance report, we have a quorum, and I have the pleasure in declaring the meeting open. I am pleased to be able to extend a warm welcome to our shareholders, who are participating online through our virtual meeting platform, as well as those who have taken the time out to attend it in-person in our office. I would now like to introduce the Board, Sunil Taldar, Chief Executive Officer; Jaideep Paul, Chief Financial Officer; our Independent Nonexecutive Directors; Andy Green, Senior Independent Director; Ravi Rajagopal, Chair of our Audit and Risk Committee; Tsega Gabreyes, Chair of our Rem Committee; Awuneba Ajumogobia, a member of both the Remuneration and Audit and Risk Committees; John Danilovich, a member of the Remuneration Committee; Paul Arkwright, a member of the Remuneration Committee; Annika Poutiainen, a member of the Audit and Risk Committee and Board Sustainability Champion. Our Nonexecutive Directors, Akhil Gupta and Shravin Bharti Mittal. I should also like to introduce Ryan Duffy, our audit partner from Deloitte, the company's auditor. All the agenda items are fully explained in my letter, which accompanies the notice of the meeting. The notice was published on the company's website, and was sent to made available to shareholders in accordance with their instructions. I, therefore, propose to take it as read, unless there are any objections. The resolutions were listed in the form of proxy, and I do not propose to summarize them again, before we commence the formal voting process. We will once again be conducting the voting by way of a poll. And I'll be taking any questions that you may have about the annual report in general and any of the resolutions. Firstly, I would like for us to take a few moments to explain the voting procedure that we'll be using today. I'm appointing [ James Shipman ] of Computershare, the company's registrar to act as scrutinous. I will now hand over the floor to Simon [O'Hara], our Company Secretary, to explain the voting procedures. Simon?

Thank you, Chairman. Voting on all resolutions is now open. I will not be putting the resolutions to the meeting in sequence. If you are in the room, and you do wish to vote and don't have a poll card to hand, please put up your hand and our registrars will be happy to help. If you have already launched proxy form in advance of the meeting, you do not need to vote, unless you wish to change your vote. Otherwise, the Chair will complete the forecast in accordance with the instructions on the proxy forms deputy in favor of the Chair. If you do wish to complete a forecast, please do so now. Please pass this to our registers once the meeting has concluded. For those shareholders attending online, using the online meeting platform, the voting icon will appear on the navigation bar. Once you click on this, the resolutions will appear on your screen. One further click and the resolutions will appear on your screen, along with the for, against and withheld voting options. Simply select one of these options to cast your vote. If you change your mind, simply select another option. You can change your vote as many times as you wish, up until the close of the poll. Your vote will have been submitted when the voting option icon changes to a green tick, and that we have received your vote message appears. There is no final submit button as the voting is live. If any person attending the meeting online is having any difficulties with using the platform, please use the Q&A chat function, and a representative from Computershare will be happy to help. Please note that any shareholders, property holders or shareholder representatives may vote. You can vote at any time during the proceedings, until the Chair declares the voting closed. The Chair will close the voting once we have concluded the Q&A session. A clear front toward on the closing voting will be given. We will also take the opportunity for general business questions and discussions, which we will address later in the proceedings. You can start submitting questions now using the online meeting platform. If you wish to ask your question, please click on the Q&A icon located in the navigation bar at the bottom of your screen, appearing from a phone or from the top of your screen if using from your laptop. Type your message into the bottom box and click the send button to the right-hand side of the message box. If you wish to answer questions verbally, conference line details are provided below the broadcast [indiscernible]. [Operator Instructions] I will now hand back to the Chair for a short segment.

Thank you, Simon. In a challenging year, marked by rising commodity prices and currency devaluation in some countries, Airtel Africa has remained committed to providing reliable and affordable telecom services to its customers across all its countries. The company's key operating performance measure for the year ended 31st March 2024, show a 9% growth in the customer base, as well as strong growth in voice usage, data usage and Airtel money. Airtel Money has seen a 20.7% increase in its customer base and over 38% growth in transaction values. Despite the volatility in the macroeconomic environment, Airtel Africa remains focused on its purpose of transforming lives and has made significant achievements in sustainability and partnership work. The company has expanded its network coverage, often partnering with tower companies to deliver data, voice and mobile money services to more people than ever before. These partnerships also include initiatives to reduce emission and environmental impacts. Airtel Africa has also collaborated with the Rwandan government and connect Rawanda to the [indiscernible] initiative which aims to provide affordable smartphones to over 1 million people in the country by end of the year. Additionally, Airtel Money continues to reach agreement with global financial services companies to improve customer access to finance. One of the Airtel's flagship partnership is with UNICEF, designed to transform the lives of over 1 million children through education, by 2027. The company's commitment to education is evident in its rollout of the program in 13 countries, reaching thousands of school children till date. Airtel Africa's sustainability ambitions aligned with the 6 of the United Nations, SDGs and the company has published a separate sustainability report to provide stakeholders with a comprehensive and transparent account of the progress. Airtel Africa's win with strategy drives a continuous focus on serving customer needs to deliver sustainable and profitable growth, while mitigating risks and strengthening the balance sheet. Despite strong cost pressures, the company has maintained a leverage of 1.4x in March 2024, alongside continued investment in the infrastructure, as well a spectrum that will fuel our continued success. Airtel Africa's commitment to shareholder value is reflected in the Board of Directors' recommendation of a final dividend of $3.057 per share, in line with the company's progressive dividend policy. The competition of the Board has undergone changes with Sunil Taldar, the new CEO, succeeding Segun Ogunsanya as the Managing Director and CEO. Sunil Taldar joined the Board as an Executive Director and formally took on the role of CEO on 1st of July 2024. We also welcome Paul Arkwright to the Board in May. However, the 2 board members, [ Doug Bally ] and [ Kelly Rosmarin ] stepped down during the year. Additionally, John Danilovich has informed the Board of with the intention to retire as an Independent Nonexecutive Director, at the end of this meeting. The Board expresses gratitude to Doug, Kelly and John for their immense contributions to building Airtel Africa into a market-leading mobile service and mobile provider -- mobile money provider. The outgoing CEO, Segun Ogunsanya retired on 30th of June, leading behind the legacy with consistent double-digit growth and the launch of company's sustainability strategy and the UNICEF partnership. His successor, Sunil Taldar inherits a strong foundation for future success. Airtel Africa extends its thanks to all shareholders and stakeholders, for the support as the company continues its journey of transforming lives and contributing to the sustainable development of the countries in which it operates. I personally believe Airtel Africa is providing critical digital services for the benefit of the countries in the sub-Saharan Africa. At this point, I will stop and would like to now invite any questions on the business or annual report or the accounts or the resolution put to today's meeting. This is also a reminder to those of you who haven't voted, to do so now. Firstly, are there any questions from those shareholders in the room? Simon, you will assist me in dealing with that.

[indiscernible] has a question.

I'm [ Sam Holland ]. I've got a question in terms of the non -- the dollar debt, and you've obviously made great -- process progress in getting this down with the aim to get this down to zero, and can I also clarify is the debt that the operating company level -- company levels, does that have recourse up to either the parent or the HoldCo?

A very good question, and I'm glad you are also equally focused as all of us have been in the last several years on the dollar debt or the hard currency debt as the case may be in certain countries, non-dollar debt, but European are indeed pound debt. This focus has been very sharp from the management and the key stakeholders. As you would have seen, we have retired our $550 million debt at the HoldCo, which was the last debt of any kind in the HoldCo, which has now been cleared. There are some dollar debts in the countries, certain opcos, especially in Nigeria, where it was almost naira possible to get dollars in the previous period. We had to resort to dollar borrowings, because we bought equipment from outside. There are lots of services which are provided from overseas, which had to be necessarily paid in hard currency. But I'm glad to inform you that after the recent resetting of naira to dollar to the change in central bank governor and the policy, a lot of that dollar debt has also been eased off, and we continuously do so, as we progress. The same is the case in many other countries. To your question, what's our aim? Is the aim to go to the 0-dollar debt? I mean, that will be an utopian situation. I'd love to get there one day. But I can tell you that we will be focused very hard on minimizing our foreign currency debt, especially since all of us know that the local currencies are extremely volatile. It's best to borrow locally even if they are more expensive.

And in terms of the recourse of the OpCo debt up to the HoldCo or the parent company?

Jaideep can personally can probably answer with less confidence than you can, I think not, but please confirm that or give appropriate answer.

Yes, Chairman. So to answer that question, that some part of the OpCo debt are guaranteed by the corporate guarantee from HoldCo. But a large part, for example, the Nigerian debt is not guaranteed by HoldCo. It is based on the strength of the local balance sheet. So roughly, if you estimate the total debt, broadly about OpCo level, about 40% to 50% of the debt will be guaranteed by the corporate guarantee, and balance will be based on the local balance sheet.

Mr. [ Butcher ], did you have a question?

No.

So secondly, I'm just asking the operator, if we've had any questions by the webcast. So far, I could see we haven't. I'd just give a moment for anybody to ask a question via the webcast. Finally, I would ask the moderator to confirm whether we have received any questions from the conference call? [indiscernible].

We have no conference questions at this time.

Could you repeat that?

We have no teleconference questions at this time.

Very good. So Chair, we received no further questions.

Okay. In that case, judging from the information, Simon, that you are providing me from all sources of question, we can conclude that there are no further questions from any shareholders. In that case, ladies and gentlemen, at the conclusion of this meeting, may I say the poll is now closed. I can declare that all resolutions are carried. The final poll results will be available on the website and via RNS in due course. And that, gentlemen -- ladies and gentlemen, concludes the meeting. Thank you.