MTN Group Limited (MTN) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. My name is Thato Motlanthe, and I look after Investor Relations for the MTN Group. It's my pleasure this afternoon to welcome you to the annual results presentation for FY 2020, taking place during the afternoon for the first time rather than early in the day as has been the case over the past few years. I trust that you've been able to access the presentation, which is available on our website, along with our results. Please be assured as we present to you today that we are observing all necessary COVID-19 protocols, including social distancing. 2020 was indeed a year of great change for all of us. Not only globally, but also for the MTN Group as a business. It encourages us to adapt and change the way we do things and evolve the way we interact with each other. Last year, for example, we hosted our first ever virtual interim presentation. This year, we're taking it a step further by refreshing our annual results program. This aims to improve efficiencies and the flow of events for the benefit of all of our stakeholders, and this includes incorporating a broader base of shareholders into the live presentation. So thank you for making the time to join us this afternoon. And again, I welcome to all of you who've joined us via the various platforms, and especially the MTN-ers across our markets. Indeed, our performance over the last financial year was driven by the resilience of our people, along with the enhanced business model that we've entrenched over the past few years, during what was undoubtedly a very challenging year. As we lap a year of having COVID-19 being a part of our daily lives, we can look back and take some pride in having worked together through the challenges. Fueled by our deep desire and ambition to be a forceful progress in our markets, we -- in the markets that we serve, we managed to power through and deliver the results that we present to you today. As a business, and we are truly grateful for all of who've worked this -- that walked this journey with us. Now if we move on to the order of business for the afternoon, we will be unpacking the annual results in the following manner: MTN Group President and CEO, Ralph Mupita. He will kick us off with an operational overview. Then, Sugen Perumal, who's our acting CFO, will present the highlights of our financial performance. Ralph will then come back and take us through an update of our strategy as well as the focus for 2021. We will then close off the session with a Q&A segment with Ralph and Sugen answering and responding to your questions. Please send these via the webcast Q&A as well as through our twitter handle, which is @MTNGroup. Finally, in terms of the admin, you should be looking at our standard disclaimer and safe harbor statement, which covers the presentation for today. And at this point, it is my pleasure to hand over to Ralph Mupita. Thank you.

Thato, thanks very much, and I just want to extend my own welcome to everybody who's joining us on the various media platforms for our results presentation today. And in particular, the 20,000 MTN-ers, who have been behind the delivery of our results, of which, Sugen and I are proud to represent them in delivering these results to broader stakeholders. And as Thato has mentioned, we've come through a very challenging year in 2020. I think all of us have experienced either directly or people we know close to who've had challenges with COVID-19. Some have passed on and some have impaired health. And I think it's appropriate just to recognize the challenges that we are facing within our broader society. As Thato said, let me kick off with a view of our operational results, starting with the financial highlights, which Sugen will take us in more detail. Suffice to say that we're very pleased and encouraged by the strong operational and financial results that we delivered under very challenging macro conditions. The service revenue level we saw in constant currency terms, service revenue up 11.9%. And that is a story basically of 2 halves, where we had 9.4% in the first half and actually 14.4% to deliver the strong 11.9% result. The big driver for our results there was the surge in data and data traffic. We experienced, across our operation, a 110% increase in data traffic during the COVID year of last year. And we saw a very strong performance in data revenue, which was up 31%. So that was the most material absolute adds to the growth in the financial profile of the business. We managed expenses actually very well. We saw EBITDA rising ahead of service revenue, driving operating leverage and the lines below EBITDA were very well managed, and we saw our headline -- adjusted headline earnings up pretty much close to 52%. So a very pleasing result of multiyear now adjusted headline earnings per share growth that are in the double digits. In terms of our investment program, which started off quite challenged in the first half, many of you will remember that we did reduce our guidance, particularly at the end of quarter 1 for the year. But as we move through the end of Phase 2 and into quarter 4, we experienced a very strong capitalization in building more resilience and capacity in our network and actually added ZAR 12.5 billion of CapEx in the last quarter to end the year with just under ZAR 29 billion of CapEx. And this number is pretty much the level of capitalization that we had planned pre-COVID and so thanks from my side to our network and supply chain teams who managed to work through all the challenges with lockdowns to end the year with full capitalization. And that quarter end investment profile has set us up for a very strong start into 2021. Moving on the balance sheet. And Sugen, will take us in a lot of detail around the balance sheet movement, a few points to call out. Holdco net debt remained stable at 2.2x, notwithstanding some of the challenges that we had, particularly around Nigeria upstreaming, which I'll talk to. And so when you look at the group overall leverage, that was down from 1.1x the prior year to 0.8x, a very pleasing result of ensuring balance sheet resilience during the period. And Sugen will cover, you'll see that our liquidity profile for the group remained resilient, gives us the ability to be able to withstand shock and also to have financial firepower for us to invest more broadly across the business. What is also pleasing has been the operating cash flow growth, which was just over 117% to ZAR 28 billion, very strong operating results from our markets who have obviously been very focused on driving broader efficiencies. In terms of returns, you will well remember as investors that we introduced return on equity as a medium-term guidance, and many of you will remember, 2018, was more like 11.5%. Very proud of the way we've managed both the balance sheet as well as the P&L to be able to talk today about ROE at 17%. You're well aware of our target, which is greater than 20%. And I think we have the momentum to break through the 20% medium-term guidance in the near term. The final highlight I would call out is, obviously, the decision that the Board has taken around the 2020 final dividend, where the Board has decided to suspend the dividend in light of some uncertainties that we face particularly around cash upstreaming. But more importantly, as well, our desire to deleverage the holdco balance sheet faster. I made the call out in terms of the fact that our holdco leverage was 2.2x. We had guided, we wanted it below 2x. And part of our decision framework was a desire to see that leverage decelerate much faster. I'll come back in the next chart, just to talk in a little bit more detail around the 2020 final dividend decision as well as the outlook for dividends. So the 3 really important messages that I'd like to land today around the dividends. The first is the suspension of the final dividend has a context. And many of you investors will remember that with the H1 2020 results, we did paint out 3 uncertainties that resulted in us suspending the interim dividend of 2020. There were 3 factors. The first was that the cash upstreaming from Nigeria had been poor, and we hadn't been able to upstream our 2019 final dividend at the time that we released our half year results. The second was the uncertainty around timings around the ARP and there are 2 material ARPs that you guys are fairly aware of, that is IHS and then the further sell-down of MTN Nigeria. We have a desire to further localize another 14-odd percent. So the timing of those ARP proceeds have been seen as uncertain given COVID effects that we were experiencing then in 2020. The third was more a general assessment of COVID-19 risks. We had just gone into the first wave of -- or peak of COVID-19. And so we said that we would make a decision on the final dividend at a maximum of ZAR 3.90 based on the usual solvent and liquidity assessments and those 3 specific issues in particular. And as we assessed those conditions, they have not materially improved, and we wanted to focus on deleveraging the holdco balance sheet faster. That is the rationale set for the suspension of the 2020 final dividend. We also made another decision, and the Board resolved to suspend the previous dividend policy, which was framed as ZAR 5 per share off a 2018 base growing between 10% to 20%. And given our concerns around the uncertainties, particularly around Nigeria cash upstreaming and also more broadly assessing COVID uncertainties, the Board decided to suspend the dividend policy. Very mindful of our capital allocation framework, where we have a very specific batting order on capital allocation, the Board also has resolved to provide clarity for 2021 on the dividend. And there are 3 important call-outs to make as we enter 2021. The first is that the Board anticipates declaring a minimum dividend of ZAR 2.60 per share, and that would be all things working through from a solvency and liquidity assessment point of view, that will be paid at the end of the financial year of 2021. So that's the first point to make. The second is that we will pay a final dividend and no interim dividend for 2021. The third point, obviously, mindful that some of these near-term uncertainties may actually play out more positively than what we're currently experiencing, the Board has also resolved to communicate to shareholders that it would consider returning any excess cash to shareholders in the financial year of 2021, either through special dividends and/or through share buybacks, whichever is more value-accretive for shareholders. And so we wanted to be super clear to our investors that if the year goes much better than we thought, the ZAR $2.60 is a minimum, and the Board would apply its mind towards a special dividend on top of that, ordinary dividend or share buybacks as we close out financial year 2021. We remain guided by our capital allocation framework, which I'll remind investors on. And these are -- the capital allocation framework is what has framed the decisions that we've taken, and we think these are the best -- these decisions are in the best interest of the company with a medium to longer-term perspective. Coming back to how the business performed in the year, just a few call-outs on our progress versus our current medium-term guidance. A couple of call-outs, I would like to raise here. Broadly encouraged by the progress we've made during financial year 2020. South Africa had their service revenue at 1.6% but I think there's a very important point in deleveraging this 1.6% service revenue growth. South Africa grew in the first half of the year by minus 2.5%. So the second half was actually exceptionally strong, where all the engines are including also fired to deliver an H2 result, which is more like 5.7% growth in service revenue. So the second half of the year, particularly when we lapped the telecom revenue of prior year 2019, we have seen all 4 businesses in South Africa in the second half, growing positively. And as I said, the second half was a 5.7% service revenue growth, which is in guidance. So we have it as red in terms of a total result. But as we look at the momentum in the second half of the year, which we are seeing in the first 2 months of this year, South Africa is growing very strongly. And so to Godfrey, Dineo, Giovanni and team, please keep pushing up this very good performance that we've seen in the second half of the year. The other call out I would make is really around holdco leverage, which you see on the chart there, as I mentioned, was 2.2x. Had the Nigeria cash that has not been repatriated -- been received by the group, that 2.2x ratio would have been below our guidance at 1.7x. So we had actually very strong upstreaming, particularly from Ghana and the South African business also contributed very strongly. And both markets delivered cash to the group above the budget. And many thanks to our colleagues there who've worked hard to deliver on those financial results. So again, medium-term guidance, we're very pleased and encouraged by the performance and in the areas that we didn't perform as expectation, we're encouraged particularly by the second half performance that's coming out of South Africa. If we look at COVID and how we managed COVID during the year, you'll remember the framing of the ways that we look at the COVID defects. Firstly, the social, broader impacts, the commercial impacts, network and supply chain, and then funding and liquidity and just focus on how we manage the crisis. At the social end, with our Y'ello Hope initiative, we were able to support communities more broadly by 0 rating some of our services, SMS, in particular. And the total value of that support to our communities more broadly, we estimate at about ZAR 1.8 billion that we gave back into societies to help them cope with COVID, particularly in the first 3 quarters of the year. On the commercial side, we did see digital channels pickup in terms of volumes. And as an example, some of you may well remember, when we're talking about Nigeria electronic recharges. At the beginning of last year, they were about 35%. And now at the end of 2020, they are at 45% and continue to increase. So we are seeing, as part of COVID, customers behaving more differently and actually driving the digital acceleration, which I'll talk to in a short while. On the network and supply chain, the networks remained fully invested. And as I mentioned, a very strong quarter for capitalization, which is giving us some momentum as we start 2021. And we maintained sufficient headroom in our network to pick up on that significant data traffic that we saw across our markets. We maintained a rolling buffer, 12 months buffer of critical spare parts so that enabled us to ensure the resilience and capacity within our networks. On funding and liquidity, so again, we'll give us more detail. Just 2 call-outs to make, the liquidity profile of the group, very strong, ZAR 41 billion, against our internal limits of ZAR 20 billion of liquidity, either cash and committed facilities. So we're well covered there. And then on the refinancing, much thanks to the treasury team, who are able to finish off refinancing and funding program very early where we did a funding of ZAR 18 billion in total. So the business was able to remain resilient and responsive during the first wave and for the full part of last year, and we're very much focused now on how do we take this business forward, understanding the kind of future impacts that we think are more permanent going forward across our markets. If I talk about the year and as I mentioned, this is really a tale of 2 halves. I did give you a sense of South Africa, in particular, about H1 and H2. But if you look at the 4 portfolio, there's some interesting and important dynamics that underpin the results that we generated. So you can see there that we had almost 2/3 of our subscriber net additions coming through in the second half of the year at 18 million net adds. Nigeria contributing very strongly, notwithstanding the fact that the last 2 weeks of Nigeria were impacted by the SIM registration suspension. That subscriber net add fed into the recovery we saw with voice. Voice under pressure, in particular, in the end of March last year and into April, Nigeria, in particular, but we've seen a strong recovery come through voice and as many of you know, as much as we're seeing a digital acceleration across our markets, our voice is still the majority of the service revenue that MTN generates across its 21 markets. On data, we see a similar profile, H2 better than H1, and the data revenue also grew strongly. There are some base effects for the H2 comparator. We had a very strong H2 in 2019. Many of you will remember that we pushed very strongly with 4G rollout in Nigeria. So we had a comp period that was actually very strong, but we still experienced very strong data growth. And then on Mobile Money, our fintech platforms, notwithstanding the fact that we did 0 rate some of our transactions, P2P, for a period of about 3 months across most of our markets that we saw a strong recovery coming through the second half of the year when some of those initiatives were ceased, and we started charging for some of those services. So again, a very strong second half. And as I said, we've seen quite a lot of that momentum coming into the early parts of this year. Again, just talking to the regions and picking some of the highlights around South Africa and a couple of points to call out for market context. The South African economy obviously contracted under the pressures of COVID-19. But for our prepaid customers, there was some relief that came through that provided us with resilience in our prepaid business. For those who are close in the SA market, there were these TERS benefits that were given to lower income South Africans. And we think some of that spend and display spend for transport as people were staying at home, has been quite supportive in how we've seen the resilience in our prepaid business. We also benefited from the award of temporary spectrum to enable us to pick up on what was significant data traffic that came through. And that temporary spectrum is still with us. And then on the wholesale side, it really is a tale of 2 stories, which is, in part, we had telecom in the base for the first half and it wasn't in the second half. And we've seen actually that the second half, the wholesale actually grew. And actually, as Sugen will mention, Cell C actually grew their revenues by 10% in the year relative to the prior year. So a lot of activity in the South African business. And as I said, we've seen the consumer -- the 2 consumer businesses being very resilient. And we've seen now a sustained momentum of our EBU business continuing to grow double digits. It also benefited from university deals as many of the students were learning from home. And in terms of our investment profile, ZAR 7.2 billion invested in our network and some of that investment obviously going to IT, where we're making quite a lot of investment around our billing platform, and preparing for kind of a multiyear restructuring around our enterprise resource management program there, which we call boost across the market. So that will be supporting South Africa. So again, solid results are delivered by South Africa. And I would remind you of the H1, H2 dynamic where all businesses in South Africa were growing positively in the second half of the year. In terms of Nigeria, Karl and Ferdi obviously gave capital markets feedback on the Nigeria performance last week. But there were 3 fundamental macro impacts impacting our business. And some of those impacts flowed through, particularly to the EBITDA margin outcome that we saw in Nigeria. And Sugen will cover that in some detail. The first, obviously, is the currency depreciation and volatility, and lack of sufficient dollars to be able to repatriate the dividend, as I spoke about earlier. There was also an increase in value-added tax that came into our OpEx base. And then the final, at the end of the year, was the SIM suspension, which affected net additions towards the last 2 months -- sorry, in the last 2 weeks of the year. Obviously, the team has been very focused, in particular, on driving the expansion of the 4G network and increasing population coverage across the markets. And there was an important renegotiation of the IHS agreement to ensure that the longer-term benefits for the company. We have 2 portfolios of master lease agreements with IHS in Nigeria, one that's -- one set that runs to 2024 and another set where most of the towers are that runs to 2029, and we renegotiated this to get better pricing, which will drive better economics over the medium to longer term. And in particular, our technology upgrade pricing was brought down and we've got favorable pricing for fiber rollout, which will be critical over the medium term. So overall, in Nigeria, a very solid set of results, but some pressure on margin, which Sugen will talk to. In terms of the other 3 regions, a very broad-based delivery right across our markets. You can see there in the chart that service revenue has been very strong. But I think beyond service revenue, what you're not seeing on this chart is, what are these markets adding to the margin evolution of the group. And I'd make a couple of call-outs. SEAGHA actually increased, as a region, its EBITDA margin by 400 basis points, WECA by 320 basis points and MENA 250. So the regions are not only growing the top line, but also growing the earnings base of the company, and you see that being reflected in the contribution of the improvement in return from operational execution. And Sugen will talk about that. So very pleasing broad-based performance across the business. If we take a look at our asset realization program and portfolio transformation, which we announced 2 years ago, the headline here is we delivered commendable progress and the existing market condition of ZAR 4.3 billion of proceeds to the group and that's against our medium-term guidance of 20 -- greater than ZAR 25 billion. Importantly, we closed out on Jumia. The ATC transactions were completed last year for just under ZAR 9 billion of proceeds to the group. But those proceeds were recognized in the prior year before we set a new target for proceeds. And BICS closed last month. And actually, we received the net proceeds in our bank account already. As we look ahead, there are 2 material parts of the ARP that are important. And we are looking into '21, a lot more hopeful in terms of their execution given market conditions. The first is IHS, which we fair value at ZAR 27 billion. And the second is exploring the sale and leaseback of the SA towers. We have a portfolio in South Africa of about 12,700 towers. We've appointed advisers in the process of readying ourselves for a review of an OpCo friendly sell and leaseback but also release cash over time. And I just -- again to remind investors, the way we think about the IHS, it's a store of value equivalent to the dollar debt that we have on the balance sheet. And so the execution of IHS over time will be transformative to the financial shape of the business. So we remain very engaged with IHS as a company. And under current market conditions, we think it's more likely that they will do their IPO in this calendar year. Last year, what impacted them was COVID uncertainty in the first half of the year and the second half was running too close to the U.S. elections, given their desires to list on the New York Stock Exchange. We obviously also focused on the localizations across our markets. The one that is a very simple one that we -- or carry on is the Rwanda listing by introductions, but we're well prepared and market conditions being conducive for the Nigeria for the listing, all the proprietary work is done. And at the point that it looks like dollar availability becomes available, we are ready to progress with the Nigeria further localization. All proprietary work is done. As we look at our pan-African focus, we did announce last year that we intend to have an orderly exit of the Middle East over the medium-term with a Phase 1 focused on the consolidated subsidiaries and the Phase 2 on our substantial operation in MTN Irancell. So with regards to that plan, we still remain focused on and committed to executing the transaction with Teleinvest in MTN in Syria, you would be well familiar with some of the developments in Syria around the guardianship of the entity. We're remaining robustly engaged with authorities there and are committed to closing out the transaction that we had signed up with Teleinvest last year. And so that part of the Middle East exit remains a priority as we look forward in the year. But good progress all the same around our asset realization program in very challenging market conditions. And finally, before I hand over to Sugen, just to call out on ESG. We've made good progress on ESG in the year. But we believe that there's a lot more that the company needs to do. And we're making ESG at the core, a big focus for the company going forward, and we'll talk about that as we explained in some detail, the revised strategy for the group. But just a couple of call-outs on our pillars that supports our ESG framework, eco responsibility. We have signed up to get to net zero emissions by 2040 and set ourselves some very challenging targets over 2019 base, where we're looking to get a 47% reduction across scope 1, scope 2 and scope 3 emissions. So Charles and the network and supply chain teams are very focused and will be reporting in subsequent periods how much progress we're making at a regular level with regards to our net zero ambition. We have a group-wide project called Project Zero, where this initiative is being managed. There also other call-outs I'd make around a sustainable society. Two big call-outs I'd make there. The cost to communicate for societies going forward is going to be a big issue. And in the year, when we look at our average data tariffs, they were down 1/3. And so that's very pleasing that more people can afford communication services across our markets. Financial inclusion is a key pillar of our strategy right now and going forward. And we did record a $152 billion of transactions across our MoMo platform. That's a very staggering number to think about offer base of 46 million MoMo subscribers across the MTN. And so again, we see both as a commercial opportunity, but also as driving financial inclusion. The other point I would call out is the progress we're making, again, on diversity and inclusion, both at the Board level, group Board level and at the executive level, we are moving quite nicely up. There's still a lot of work to be done. And we think in due course, we will be crossing the threshold, which is seen internationally as a minimum of 35%, both at Board and executive level. And we at MTN, remain very committed to that. So those are the points I would highlight on ESG. And as I said, we will report more regularly in more detail going forward. And with that, let me hand over to Sugen to take us through the financial highlights. Thank you.

Thank you, Ralph. Good afternoon to everybody and -- joining us virtually and a special greeting to all the MTN-ers joining. Over the next 25 minutes, I'll take you through the following: firstly, I'll cover the economic landscape that we operated in. I will highlight material items that impacted our reported results. I will then cover salient features in the group income statement. And then an overview of the 2 main markets, South Africa and Nigeria. I will then return to the income statement for a detailed review of key line items and finally conclude with a review of the CapEx, balance sheet, cash flow statement and returns. Before I go into the actual reported results, I'd like to first take you through the economic environment that we operated in, in 2020. Global economic activity slowed down in many countries due to lockdown as a result of COVID-19. We saw economic activity drop quite sharply in Q2 of 2020. But as lockdowns eased, we saw an economic recovery in H2. Looking into the chart, you can see that most of the economies regressed in terms of GDP and with inflation rates on a steady rise. Looking into our 2 biggest markets, the following transpired. In South Africa, we saw the economy contract by 8%, had a sovereign downgrade and rent depreciation. While in Nigeria, we saw higher inflations an increase in VAT, sovereign downgrades, oil price volatility and a devaluation of the naira. 2020 was indeed a challenging year. Our response to the crisis allowed the group to keep abreast of the challenges presented by COVID-19. Looking at the material items impacting our reported results, there are 4 material items I'd like to cover. The first being currency. The weaker average rand against the basket of currencies across our consolidated subsidiaries resulted in reported results being higher than constant currency results. The weaker closing rate for the rand against the U.S. dollar impacted the balance sheet items, where reduction in debt was offset by ForEx losses. In total, we had ZAR 4.5 billion of ForEx losses recorded across our markets. The second material item was significant transactions, of which there were 3. The ATC tower companies were classified as held for sale at the end of 2019, and the transaction closed in 2020. The group received cash proceeds of ZAR 8.8 billion and recorded a net profit of ZAR 6.1 billion. On MTN Syria, it was classified as held for sale, given the portfolio review done in the Middle East. The net assets attributable to Syria have been written down to its estimated recoverable amount and an impairment loss of ZAR 1.1 billion was recognized. On the 25th of February 2021, subsequent to the end of the year, MTN Syria was placed under judicial guardianship. This event was a significant change that occurred post year-end and could not have been anticipated at the end -- at December 31, 2020. Therefore, this has been treated as a nonadjusting subsequent event. Additional disclosures have been included in note 9.4.3 of the financial statements. On our 20% investment in BICS, which was classified as an asset held for sale, the transaction closed in Q1 2021. At the end of 2020, we recognized an impairment loss of ZAR 397 million on remeasurement of this asset. The third material item to note was holdco leverage and upstreaming. COVID-19 had a significant impact on foreign currency availability, in particular, Nigeria, where we had not upstreamed ZAR 4.2 billion of dividends. Had we upstreamed the Nigeria dividend to holdco, our holdco leverage would have been 1.7x compared to the reported 2.2x. Lastly, I'd like to cover accounting policy changes and COVID-related impacts. The group implemented a voluntary accounting policy change relating to the release of foreign currency translation reserves and has changed from a step-by-step method to a direct method. On COVID-19 impacts, as our retail customers, enterprises and distribution partners were impacted by the pandemic, we saw an increase of ZAR 2.2 billion in provision for doubtful debts. Due to the impact of COVID-19, we recorded impairment losses on goodwill of approximately ZAR 1 billion. So if we now look at our group income statement and our reported results or on constant currency, we had solid constant currency service revenue growth of 11.9% in the period driven by double-digit growth in Nigeria and Ghana. South Africa increased by 1.6%, impacted by ongoing effects on its wholesale business. In H2, South Africa service revenue was strong, growing at 5.7%. Excluding once-off items, you can see that constant currency growth in EBITDA were 13.4% and reported EBITDA increased by 21.9%. The increase in depreciation, amortization and goodwill impairments was largely driven by increased CapEx additions in the current and prior periods and the goodwill impairments mentioned earlier. As you move down the income statement, you can see an improvement on the JVs and associates line. The increase was driven predominantly by the discontinuation of Jumia as an associate and BICS being accounted for as held for sale. Further down, we see a noticeable change in income tax as a result of improved profit before tax. The group effective tax rate for the period was 32.5%. This was positively impacted by the nontaxable gain on the disposal of the ATC tower companies. Adjusted HEPS, our measure of underlying operational earnings increased by 51.5% in the period due to improved operational performance. Now moving on to our 2 major markets, and I'll start with MTN South Africa. Service revenue increased by 1.6%, impacted by the reduction in national roaming revenue in the period as a result of base effects where Telkom was included in 2019. We had unrecognized revenue from Cell C of ZAR 414 million at the end of the period. Excluding wholesale, service revenue increased by 3.2%. We continue accounting for Cell C on a cash basis and have seen a 10% increase in Cell C roaming revenue when compared to 2019. Voice revenue was down 5.6%. This was driven mainly by reductions in the effective tariff, which declined 15%, and as there was an increase in the penetration of voice bundles and CVM activities, whilst traffic was up 9.5%. Data revenue was at 15.3% -- was up 15.3%, supported by a 79% increase in traffic and an 11% increase in active data subscribers, which now totals 15.7 million. The effective rate dropped 32.6%, partially impacted in Q2 by the reductions in data pricing in line with the agreement signed with the Competition Commission. Wholesale revenue declined by 16.4%, driven by the base effects mentioned earlier. I'll then go to a bridge view of the key segments of South Africa service revenue. A few comments to make. Encouragingly, the consumer prepaid business was up 2.9% in the year. This was achieved through strong commercial execution in CVM and prepared data growth of 11.7%. The consumer postpaid business delivered service revenue growth of 5.3% in a highly competitive market. The growth in the year -- the growth we experienced in the year was driven by good customer take-up of MTNs megadeals. Enterprise service revenue increased by 15.5%, benefiting from interventions aimed at stabilizing churn and adding new corporate subscribers as well as an uptake of work from home solutions. This was further boosted by the sale of data deals customized for universities in order to facilitate online learning, of which some of these were short-term, leading to a slowdown in the fourth quarter. Excluding university deals, enterprise service revenue growth would have been 12%. If I can go back to expenses, margin and CapEx for MTN South Africa, you can see that cost of sales were significantly lower by 7.3%, impacted by a reduction in -- impacted by the device distribution -- reduced device distribution giving lockdown as well as lower commissions. Device cost of sales declined by 10.9% as device volumes were lower by 10%. Commission expenses were down 11.5%, driven by lower commissionable postpaid connections as a result of lockdowns as well as implementation of our smart commission model that was positive for commission expenses. OpEx is up by 4.7% due to an increase in network operating expenses, mainly rent and utilities and maintenance. South Africa also recorded a provision for doubtful debts of ZAR 917 million in the period, given credit -- expected credit losses increased -- increasing as a result of COVID-19. The EBITDA margin improvement -- improved by 1.7% to 39%, driven by good expense management and lower device cost of sales. The constraints presented by COVID-19 to roll out our networks, along with the increased focus on efficiencies, resulted in a CapEx intensity of 16.6% in MTN South Africa. If I then look at MTN Nigeria, we recorded as -- we -- many of you would have seen the results reported last week. So I'll only focus on salient points. We recorded a solid 14% -- 14.6% growth, driven by voice, data and fintech. In terms of expenses, these were up 22.3%, while OpEx increased by 29.2%, impacted by higher costs associated with aggressive 4G rollout and higher site rental costs given the naira depreciation against the dollar during the period. In addition, effective Q2, the reference rate for the conversion to the naira on the IHS tower contract moved from the CBN rate to the NAFEX rate. Nigeria also reviewed the treatment of nonrecoverable VAT on lease payments to account for it as expenses over the lease period. All these led to a reduction of margins by 2.5 percentage points, driven mainly by the impact of rental costs mentioned above. MTN Nigeria continued to implement expense efficiency initiatives, aiming at restoring margins in the near term. The total CapEx expenditure was ZAR 12.7 billion for the period, and we achieved a CapEx intensity of 21.3%. If I then go to group service revenue, voice, data and fintech were the key drivers for the period. Voice revenue grew 4.8%. It came under pressure from COVID-related lockdowns in the early part of Q2. But as lockdown restrictions were eased in various markets, voice revenue recovered through the remainder of the year. On data revenue, it grew 31%, driven by a surge in traffic of 110%. The active data subscriber base grew by 19 million, closing the year at 114.3 million. Digital revenue increased by 27.1%, with an acceleration in growth in H2, supported by greater uptakes of our service and base effects on the vast optimization that we concluded last year across our markets. Wholesale revenue declined 12.4% due to the national roaming effects from South Africa. If we then move to fintech revenue. Fintech revenue grew by 23.9% in the year. We saw an acceleration in the adoption of mobile financial services as a result of COVID-19. Mobile financial services revenue was up 26.5%. This was driven by an increase in the number of MoMo subscribers by 11.7 million to 46.4 million users and each generating an ARPU of $1.2 a month. The value of MoMo transactions was $152 billion as we process 12,400 transactions per minute, which is 35% up versus 2019. Direct operating costs were well contained within -- with EBITDA margin improving by 5 percentage points to 46.8%. Moving to the group EBITDA. On this slide, you can see the drivers of group EBITDA, both in absolute terms and margin. Overall, group EBITDA was up 13.4% on a constant currency basis resulting in improved operating leverage. The growth was led by performances of Nigeria, SEAGHA and WECA regions. At an operational level, EBITDA margin expanded 0.09 percentage points with positive contribution from all market say for MTN Nigeria. The turnaround in the WECA region during the period was particularly encouraging. We had a strong year from a service revenue perspective, with a growth of 8.8% versus 2.9% delivered in 2019. The turnaround is contributing to margin improvement in the group. The group's reported EBITDA margin improved to 45.3%, supported by the gain on disposal of the ATC tower companies. Looking at our finance cost and leverage. The increase in net finance cost was a result of an increase in interest expense on lease liabilities. ForEx losses of ZAR 4.5 billion were mainly driven by losses in Sudan and South Sudan of ZAR 1.9 billion due to the higher rate of settlement of foreign-denominated balances. As you can see, the average cost of debt decreased to 7.8%, driven by lower interest rates during the period. Moving to leverage, at 0.8x, the group leverage improved and benchmarked well against our emerging market peers. As I mentioned earlier, the holdco leverage remained at 2.2x, with holdco net debt decreasing by approximately ZAR 12 billion. The aim -- this was aided by the progress made in ARP and improved operational performance. It was also constrained by the cash upstreaming challenges experienced from MTN Nigeria and a weakening of the ZAR versus the U.S. dollar. Looking at our headline earnings per share. The table provides a reconciliation of attributable earnings per share due to adjusted headline earnings per share, that gives more visibility and operational performance. Looking at the reconciliation between EPS and HEPS, the main adjustments are impairment of the goodwill and held for sale entities as well as reversal of the gain on the disposal of JVs, resulting in HEPS of ZAR 7.49. If we adjusted the reported HEPS for the nonoperational items of which ForEx losses makes up the largest portion being ZAR 1.68, we get to an adjusted headline earnings per share of ZAR 8.77. As you can see in the chart, adjusted headline earnings per share increased by 51.5% in the year, showing positive operational earnings momentum in challenging trading conditions. It's pleasing that we have seen 2 years of growth in HEPS moving from a decline in 2018. On CapEx, we see further improvement in our CapEx intensity, in line with our medium-term guidance. We closed the year at 16% intensity, excluding ROU assets. We remain focused on increasing the resilience and capacity of our networks, although the effects of lockdown restrictions have delayed some site rollout. We capitalized ZAR 28.6 billion in the period, while rolling out a total of 3,342 3G sites and 8,354 4G sites. As you can see, RAN and Transmission account for and 69% of total CapEx, and we continue to invest in the digitization and modernization of our IT systems. Although the focus for CapEx rollout is on 3G and 4G deployment, we are ensuring that in key markets, future RAN and transmission deployments will make our net worth 5G-ready. MTN South Africa launched its 5G network during the year with 156 sites live. The launch is a culmination of extensive 5G trials and testing and was enabled by the allocation of temporary spectrum from ICASA. In South Africa, the multiyear modernization of the network progressed and modernization in other markets have commenced, ensuring our network are resilient and 5G-ready. Looking at our cash flow and the view from EBITDA to free cash flow, included in noncash adjustments, impairment losses and the remeasurement of disposal groups of ZAR 1.5 billion and impairment of trade receivables of ZAR 2.2 billion with additional provisions of ZAR 2.2 billion being raised across the group. In the year, we saw ZAR 2.9 billion working capital outflow. This was driven by increased prepayments on CapEx and operating expenses as well as increases in receivables. We had paid ZAR 30 billion for CapEx in the period as we built out our networks and delivered an operating free cash flow growth of 117%. Financing activities of ZAR 5.1 billion were principally driven by the payment of the capital portion of lease liabilities of ZAR 4.9 billion. Other investments of ZAR 3.5 -- ZAR 3.3 billion were driven by the proceeds from the disposal of tower companies of ZAR 8.8 billion and Jumia of ZAR 2.3 billion, offset by additional investments and restricted cash of ZAR 6.4 billion and the realization of treasury bonds and bills in Nigeria. Looking at our holdco net debt. Looking at the net debt profile, we have seen that a net debt decrease of ZAR 12 billion in absolute terms, while holdco leverage remained constant at 2.2x due to the challenges in upstreaming and the weakening of the rand to the U.S. dollar. Group leverage has improved from 1.2x to 0.8x due to the improved operational performance. We have made improvements in our debt mix with 52% of our debt being rand denominated as we continue to reduce our exposure to U.S. dollar debt and improve the funding mix at a holdco level. On liquidity, we had a healthy position, which has improved since 2019. At the end of the year, we had cash of ZAR 16.4 billion and at a holdco level, access to undrawn facilities of ZAR 24.6 billion. Execution of our 2020 refinancing priority has progressed well, and we executed ZAR 18.2 billion to deal with debt maturing in the next 15 months, ending March 31, 2021. We remain committed to our medium-term guidance on holdco leverage. This will be achieved by maintaining growth and operational performance, improved cash upstreaming and delivering on the asset realization program. Looking at our balance sheet. Other property, plant and equipment increased to ZAR 100.5 billion as a result of continued investment in our network, offset by depreciation. Included in other noncurrent assets is our investment in IHS, which will be carried at a fair value of ZAR 27.2 billion. Total MoMo deposits are up 80% and at the end of the year, amount to ZAR 28 billion. The increase in other current assets is due to additional investments in fixed deposits held in Nigeria. Looking further down the table, there's an increase in noncurrent assets held for the sale as MTN Syria and BICS has been classified as held for sale at the end of the year. And on current liabilities, we saw a 13% increase, mainly driven by increase in BTS accruals and foreign currency denominated creditors in Nigeria. So let me conclude my presentation by looking at the progress we made on return on equity. The chart shows a bridge view of the drivers of return on equity, excluding hyperinflation. We see that ROE increased from 13% to 17%, driven by operational earnings growth from the consolidated subsidiaries, with the most significant contributions being Nigeria, SEAGHA and WECA. As you look at the bridge view on ROE development, the operational results were strong. Adding 6 percentage points to ROE after offsetting for depreciation and amortization, finance costs and tax. The nonoperational impact reduced the reported ROE by 2.2 percentage points driven by movements in FCTR and noncontrolling interest as a result of the weaker rand on reported results. So ladies and gentlemen, in summary, we had a strong operational performance in 2020 in very difficult market conditions. We saw double-digit service revenue growth, improved operational leverage, while reducing holdco net debt by ZAR 12 billion. In addition, we saw group leverage improved to 0.8x and growth in ROE of 4 percentage points to 17%. That concludes my presentation, and I'd like to hand back over to Ralph.

Sugen, thanks very much for taking us through a very detailed overview of our financial performance, lots of numbers to get comfortable with there. But as Sugen, summarize, and overall, a very pleasing set of financial results delivered under challenging macro conditions. We thought as part of today's review, we would give you some context around the strategy, repositioning of the company. We did spend a good part of the second half of last year and concluded in November, a strategy review, which we now internally frame as Ambition 2025. We're very excited about this at MTN, not only in the way that the strategy will drive the socioeconomic progress of Africa, but in the way that we'll be able to crystallize and unlock value that we think is deeply embedded in our core business. We have a view, which I'm sure many of you will agree with is that the current share price does not reflect the value that's inherent in the company. And as part of Ambition 2025, we're taking further steps to expose the value as well as accelerate growth across our markets. So I will give you a bit of an insight into the strategy. We are holding a Capital Markets Day in early July. We will spend a whole day going through what I'll summarize probably in about 10 minutes. We'll spend a whole day and taking -- and having our executives take you through all the elements of it. So before I go into that strategy, maybe just a review of where we are today. So we've made a lot of progress over the last 4 years, as you can see on this chart, and we picked on a couple of KPIs that demonstrate the solid progress we've made as well as the strong foundation that we now have to take the company going forward. We've grown subscribers very strongly, and we're talking today about 280 million subscribers, 90-day active subscribers. We started the base in 2017 at 217. We also add a business that was only #1 in 3 of our then 22 markets. We did sell -- we did exit Cyprus. But today, we stand with 15 of our markets having a leadership position in NPS across various categories of which NPS measurement. And many thanks to our teams across the markets who have taken a lot of efforts to improve the total customer experience as well as the network experience, and that's the progress that we've seen there. We've invested heavily to drive much more significant population coverage across our markets. And today, we cover over 0.5 billion people with our radio network. Now this investment as well as improvements in the customer experience are flowing through to the financials that Sugen mentioned. But we're also showing on the chart the progression that we've seen. So we had high single-digit service revenue growth. Today, we're just tipping over into double digits. We've got a balance sheet that obviously has been challenged by the dollar debts that we took on in just after the 2015 SIM registration fine. And so as many of you know, we've got bonds maturing in 2022, '24 and '26. But what we've done actively is to try and bring that holdco net debt position down as well as improve the mix to what Sugen spoke about. And what's been pleasing also is the improving return profile. And we will remain pushing that return profile way above the 20% that we've had as a target. So we are starting off on a strong foundation as we look to pivot the strategy. Now if we think about the case for change for MTN Group, there are obviously some challenges that we are live to and we're very realistic about, and that's about the risk profile of the group. And part of reducing that risk profile is our orderly exit of the Middle East. The second is really around the dollar debt that we would like in the nearest of time to be an issue that we're not talking to the capital markets about, and we've actually extinguished that debt. And actually, the company has greater financial flexibility. But beyond the challenges, there actually are a lot more opportunities. And much of those occasioned by what's come through with COVID. We -- in 12 months, we did experience a massive acceleration in the demand for digital services and connectivities across our markets. And we believe that there's a small window for operators such as MTN to be able not to -- to participate, not only the connectivity but in the services that sit on top of that connectivity as Africans more broadly start consuming these services and benefiting from what comes through with access to the Internet. We also think that from our perspective, as I mentioned, we do need to reveal and crystallize the value that we see that's inherent in the company, the share price and the valuation that we see does not adequately reflect, and we need to do work as a management team and as a company to reveal that actually to investors. So the case for change that we've discussed with the Board is premised predominantly around those opportunities and those challenges. And to give you a bit of insight on what those things are, the next 3 slides will be key. The first thing that we are saying in terms of this strategic pivot is that we do want to build very scale platform businesses on top of a very strong connectivity, pretty much South Africa's largest connectivity network. And we call out 5 platforms that we are investing in and at different levels of maturity. So at the one end, the fintech platform is relatively mature against Chenosis, which is our Africa API marketplace, which we launched last year, but we think that, that can grow materially over the next 5 years. So in fintech, as an example, we believe that we've built a scale business, but we can scale it even more. We have ambitions to double the size of the fintech platform over the next 3 to 5 years. We want to broaden the product proposition, move from payments to lending, to insurance, to savings. And ultimately, the intersect of the fintech business and our ayoba business is the opportunity for mobile commerce. So these elements of the strategy you would have heard before in bright, but we're looking to accelerate this and expose these as distinct businesses, as I'll explain later. On enterprise, we focused in the last couple of years on the connectivity side, building and indexing up on enterprise. As MTN Group, we had a relatively low profile of service revenue contribution coming from our enterprise. Now with industrial IoT coming into effect, workloads moving to the cloud, we think that there's an opportunity for us to create a significant and scale enterprise business. We've already started pushing in that direction. Jens Schulte-Bockum, our group COO, is leading our efforts in that and supported by our Head of Enterprise in South Africa, who's now got a dual role as Head of Enterprise and looking at enterprise across the business. And we think going forward, there are opportunities to move into unified communications, IoT, as I mentioned, cloud, and SD-WAN as an example. The other platform that we really believe is important to grow our business and drive a lot of efficiencies is thinking about our network as network-as-a-service. Right now, we are offering national roaming in South Africa, Cell C, in particular at the moment. But this is a service that we believe can improve the economics of our businesses more broadly across markets and some of our markets are constrained in the way that customers can afford communication services. We think that extending our well-invested networks to be able to support #3 or #4 players in certain markets is in and of itself a potential business for us to drive growth as well as efficiency going forward. And the fifth platform, as I mentioned, is Chenosis, our African market's API, where we look to aggregate APIs and ultimately be able to monetize them over time. So these are the 5 platforms that when we start talking about platforms, that we see inflicting growth in the company over the next 5 years. Now encapsulating our strategic intent, we've basically built our strategy across 4 important pillars, which I'll talk to in some detail in terms of what our objectives are. So the first objective is really around building the largest and most valuable platforms. And some of them we want to structurally separate them and expose them to reveal the value that we believe is inherently built into the company. And I'll come to that in a little while. The second is recognizing that what gives us the ticket to the game is the -- to continue to have leading connectivity operations, and we see scope to drive greater value through these businesses, and again, I'll talk a little bit about what our objectives are. Create shared value is a pillar that we've adopted as one of our strategic priorities, and that's about the sustainability of the business. And also the role it plays in terms of driving progress across the markets we operate in. And the final pillar is accelerating the portfolio transformation. So let me talk a little bit about what our objectives are. And on this chart, you also see some of our ambitions that we are projecting as we go forward over the next 3 to 5 years. So the first strategic priority is the largest and most valuable platforms. What we're really looking to do there is to pivot from what are currently today, products embedded in the GSM business to exposing these more as platforms. You saw us again earlier reporting on fintech. Again, we're going to increase the disclosures around these platforms over time so that you see the underlying economics and the growth profile of these businesses as they scale. So that's the point really about pivoting. But as we're growing these platforms, we recognize that we don't need to do everything. We don't need to bring all the skills and all the capital to these platforms. We need to create vehicles that allow us to partner others. So we're driving for selective partnerships and to bring other capital into these businesses as part of exposing value. And just to give an example of some of that, as you've seen with the work that we've done with Mastercard, in developing a virtual card that allows our MoMo subscribers to be able to do e-commerce transactions beyond the network of merchants that we have, that's a smart partnership that we're looking for. Another partnership that we're looking for is in the insurance space. We have 11 million policies of insurance policy. And we've got a nascent relationship that we've been working with Sanlam and we want to look at whether we can expand that more broadly with Sanlam as an insurance partner given our own ambitions for financial services. So that's something that we'll certainly be updating, and I hope that example on the partnership provides you with some context of what we're trying to achieve there. So on industry-leading connectivity ambitions that we have in objectives, some very simple targets that we have, we want to double the data customer base, which is just on 100 million. We think that over the next 3 to 5 years with the demand and surge for data services that can increase up to 200 million. We want to own the home, as we've experienced in COVID, some of the work from home, we believe that is going to be permanent or semi-permanent. And the home in terms of just the consumption, either for work, for entertainment is going to grow. And we want to be the leader in owning the homes across the African market. We have inherent and embedded in the company, actually the largest fiber network are on the African continent. We have over 85,000 kilometers of fiber today. But we see an opportunity of exposing fiber as a separate asset class, as a separate part of the business where we can also bring in co-investors into that business as we roll out our own services for our communication needs and work towards creating a FiberCo is well ahead -- is well progressed there under the stewardship of Jens and Frédéric Schepens, who heads up our Global Connect business. So that's another aspect of leaders -- industry-leading connectivity operations. The final key area, we want to focus on -- also around connectivity operations is benefiting from the digital transformation we're seeing today. And from our perspective, there are 2 benefits. The first is that we take more of our customer journeys online, so that we're able to fulfill through a few clicks, a customer journey like purchasing a handset. That is something that we believe will improve the customer experience going forward, and we need to be at the leading edge of that. The second important aspect of the digital transformation that we see is the efficiency gains. The world we lived in pre-COVID and the world we're going to in the future is going to be very different, a lot more remote working, a lot less real estate space that we need. And we are targeting to get more expense efficiencies that allow us to drive operating leverage and also to invest in some of these growth options that I spoke about. And we've set out a target over the medium-term that we're looking to extract a further ZAR 5 billion of efficiencies of the 2020 base over the next 3 years specifically. South Africa actually has been at the lead of these expense efficiencies and to Godfrey, Dineo and Giovanni and the broader team, there were -- the OpCo that was responsible for a large majority of the ZAR 2 billion of expense savings that we were able to deliver in last year's calendar year. So that's really around industry-leading connectivity operations. Shared value, as I mentioned, is really about sustainability of the markets that we operate in as well as of the company. And we're making call-outs across a couple of areas. We want to make a material step-up in our ESG. I spoke earlier on around our Project Zero, but there's a broader set of ESG priorities that we have. We want to complete the localizations and have MTN across the markets seen on a kind of broad-based and inclusive basis. You're well aware of the localizations that are at hand, but we've also got broader plans there. And the final area is really around continued support from the nation-state that we operate in, and we'll measure that through the reputation index. Because the more trust we have, we believe that, that's an underpin to our success and sustainability. The last pillar of the strategy for us is really around accelerating the portfolio transformation and 3 key elements of this. The first is executing on the asset realization program and deleveraging the balance sheet. I think a clear message that you should take from this presentation is MTN Group wants to deleverage faster at the holdco level and give the company a lot more financial flexibility given the growth options that we see. The second is continue with our plans to exit the Middle East in orderly fashion and that allows us to simplify the business. And the third objective, as I mentioned upfront, is we want to be able to reveal the value in the infrastructure assets and fintech, in particular, over the medium term. I spoke about fiber. We have a massive data center estate that we think there are opportunities to partner with others as workloads start moving to the cloud, and we're seeing hyperscalers more broadly grow across the market, and there's an opportunity for us to make smart partnerships there and also find co-investment in the way that we roll out those businesses. And on the fintech side, as I mentioned, we already have a scale business, but we think this business can become a lot more scale. And you'll see our aspirations in terms of our enhanced medium-term guidance, really about the opportunity to ultimately structurally separate our FinCo business at an OpCo level and look towards an aggregation of this FinCo business towards a group fintech business that can sit aside of the GSM business. We're already very scaled in fintech, but we think there's a tremendous opportunity to grow this business further going forward. So as we think about the business in terms of the investment case, we think that there's a very strong investment case that Ambition 2025 provides here. We see a compelling Africa growth story here, accelerated by the digital shifts that we've seen over the last 12 months, which we think much of it is perm -- permanent with us going forward. So the pillars of our investment case is really that we are Africa's leading connectivity business. There are exciting demographic opportunities that still remain, a young population, a low Internet adoption and penetration. We're very well positioned for the long term, given the acceleration we've seen on the continent. And the return profile, we believe we can enhance it from where it is today, underpinned by a strong risk and regulatory framework as well as a very disciplined capital allocation framework that informs the decisions that we make. And when we think about the capital allocation framework, just to remind, we have 5 that have a particular batting order and under Ambition 2025, we are staying very disciplined to that capital allocation framework. We will invest appropriately into growing our businesses organically and ensuring that our networks are fully invested. We want our networks to be second to none as well as our platforms. So that's priority #1. The second is dealing with the holdco leverage, returns of cash to shareholders through dividends is third, and then selective M&A and then share repurchases special dividends close off the batting order. So just to confirm and reconfirm that our capital allocation framework remains intact under the new strategy. And given our excitement about the future and the growth prospects that come with it, we have enhanced and simplified our medium-term guidance, and I'll talk to some of the elements. So firstly, at the group service revenue, we're now targeting low to mid-teens. As you saw over the last 4 years, we've been single digits and have just crept up past 10%. So now what we see as good performance is low to mid constant currency single -- constant currency service revenue growth. South Africa, notwithstanding the fact that we delivered 1.6%, we're maintaining our guidance, mid-single digits, which is really the 4 to 6. As I mentioned, if you look at the H2 performance of South Africa, it's sitting there comfortably at the top end of the range, 5.7% after lapping out some of the base effects of H1, particularly Telkom, and all cylinders are firing in H2 on South Africa. Nigeria, I want to be a bit more precise with our guidance. Previously, we have double digits. Double digits could mean 25%, but we really want to guide you as investors that the performance we expect from Karl's business is needing to hurdle mid-teens and staying above inflation in that market. The other changes we've made aligned to the view that we see, particularly on fintech, is that we see fintech over the medium-term, making a material contribution to the group as we accelerated, and we're making a call-out that the fintech platform can deliver greater than 20% service revenue to the group over the next 3 to 5 years. Where do we sit today? We're more like 8%. So this is a very ambitious target that we're putting on the shoulders of Serigne and the broader team across our business, working in smart partnerships. I think the important point that we believe we're going to accelerate the growth by working smartly with other providers who are aligned to our own efforts to driving financial inclusion across our markets. The holdco leverage, again, our desire to bring down that holdco leverage much faster, comes clearly that we want to see our holdco leverage inflect below 1.5x. As again pointed out, had we achieved the Nigeria cash upstreaming would have been 1.7x. So there's still been above the hurdle that we're now looking forward to. So we really want to focus on a faster deleveraging of the balance sheet to create the financial flexibility to support our own growth ambitions going forward. And asset realization and ROE have been maintained the same. Now the 2 prior targets of EBITDA margin expansion, we basically looked at simplifying. We are not taking our eye off EBITDA margin expansion. We're just simply saying that you're going to see it come through the progression in return on equity. Because if we are delivering fast-growing returns on equity, we must be improving the earnings profile. So that's the reason why we've simplified and taken it out, it's not because we don't believe margins will continue to grow. And CapEx intensity. Obviously, if we are accelerating the service revenue profile, and we're keeping a tight but full investment profile on our CapEx, we should see the CapEx intensity continue to come through. And so this is really all about simplification. So as I mentioned, we will provide a lot more color in detail. At the June Capital Markets Day, we'll spend a whole day with you, probably virtually, given that we will still be probably in the midst of COVID. And I hope that you guys will be able to join us. We feel very excited about this strategy because we think it can inflict the prospects of MTN over the next 3 to 5 years. Just looking forward -- just a couple of points before we close out and go to Q&A. As we look ahead into just simply this year, I think the macro context is super clear. We've got sub-Saharan markets coming out of contraction into modest growth is what's been projected. And part of that growth is going to be impacted, obviously, by COVID-19 impacts, whether they're third waves that come through and the ability to dispense with vaccines across markets to really create the herd immunity that gets us back into a much more normal cycle. Currencies and commodities obviously are super important in how they impact the economies and how we translate cash back to the group. But the one thing that we really do think will power through in 2021 is that mobile and digital acceleration will remain. We think that this is going to be fairly sustained because we have a huge population base that is still not connected to the Internet, and there's still scope to drive our services more broadly, not just connectivity, but the services that sit on top of the connectivity. But we remain cautiously optimistic as we're looking ahead, and the caution is really around the COVID-19 impact and how the countries come out. Our business is ready and well-invested to be able to capture the growth. And at the half year results, I think we will be providing you with the context of some of the priorities that we need to be executing on to deliver on an Ambition 2025. So these 6 are what are we super focused on with the broader team. So South Africa and Nigeria, we think that these businesses can maintain an accelerating growth profile. So South Africa has done well, particularly in the second half. But the other call-out, as Sugen mentioned, is the margin expansion. When Godfrey runs this business, and we're discussing what we expect from them, he understands that we want the EBITDA margins between 39% and 42%, that's what we're trying to drive the South African business. And with Nigeria, we are not where we need to be on EBITDA margin. The call is very clear of what good looks like in terms of EBITDA margins. And the profile we need is to be moving towards the 53% to 55% EBITDA margins on the current basis. Now we won't get there all in 1 year, but that is the growth trajectory that you start seeing to move into that corridor of EBITDA margin expansion. We're going to work very hard to do the work around the infrastructure assets and fintech and we'll report on progress there at the half year, what have we done on the infrastructure side, and how are we inflecting the fintech businesses, what partnerships have we formed, and what progress are we -- have we made in terms of the structural separations at the OpCo level, which ultimately, we would look to see come through at the group level. The other important part is ARP. Market conditions, actually for the IHS, IPO process are much better this year than in prior year. Last year, IHS was confined by 2 factors. The first was COVID effects in the first half of the year. And the second half of the year is the work that they've done got caught up into the U.S. elections. And obviously, IPO and business around elections could have had negative impact. So we feel relatively confident that the IHS transaction should happen in the calendar year. U.S. equity markets are very buoyant and resilient. And we'll focus on the cash upstreaming, Nigeria, in particular, and executing on the portfolio transformation, and we'll report back on how much progress we've made. The second, on our networks, it's encapsulated by the amount of investment that we plan to make. So we are investing slightly higher than we did last year, ZAR 29 billion, to ensure that our networks have capacity and resilience and maintain our leadership position. There are a couple of complex litigations. We're working through that you guys are all familiar with, that's a priority, and we will update on progress. And the final area is really around this point about putting ESG at the core, and we'll provide progress that we've made around Project Zero and other of our initiatives that form the substance of our ESG framework. So in conclusion, I just wanted to point out 5 key items that I think encapsulates how we've seen the results, and hopefully you've seen it the same way. The first is very strong operational and financial results delivered in a challenging macro. All our main financial KPIs have progressed very strongly. The only one that remains challenged was really around holdco leverage, and that's why we took our decisions around the dividends. The second is the business resilience. The business has been very resilient under COVID-19. Networks are capable of taking the traffic, and we have enough headroom and we've been able to make a full investment program pretty much across our markets, notwithstanding the lockdown arrangements. In the near term, very focused on faster deleveraging of the holdco. I probably said that 6x today. But I think you understand our conviction of creating greater financial flexibility. My simple rationale to investors is the way we fair value the IHS is once we've been able to complete that transaction is equivalent to the dollar debt that's sitting on the balance sheet. So that transaction will be very transformative for the company going forward in its own financial profile. And that's why we put such an excellent focus on deleveraging the holdco balance sheet. Ambition 2025, we've announced it's actually in execution. And as I said, we will be able in June to actually show you the progress that we've made in a very short space of time. We think that there are opportunities there for value unlock. Some of these businesses separately carved out and sitting with their own specific group of investors. We'll have a different valuation multiple to being embedded in a core GSM business, and we will work hard to reflect that. We remain very excited about the future, and that's why we've enhanced the medium-term guidance that we see more growth, and therefore, we are committing that growth to our shareholders. And the final point is that notwithstanding all the challenges in our markets, there are many challenges, particularly in the near-term around dealing with COVID. There is an acceleration for the demand of digital services that we think is not going to abate, whether it is in doing financial services more digitally, the consumption of digital services. And we see this as the force that is underpinning MTN over the next 3 to 5 years, and that's why we remain very excited. So that's the end of the presentation. And thank you very much for bearing with -- listening to myself and Sugen, over the last hour plus. We had a lot to say. And we thought that we -- this is our only opportunity to say it with the immediate release of the results. And we're very happy to take any Q&A that you have. I have Godfrey Motsa, our CEO of MTN SA. So if you guys want to ask questions about SA spectrum, I'm just going to direct them all to Godfrey. So Thato, please pass on the questions as they come through.

Sure. Thank you very much, Ralph and Sugen, for a fairly comprehensive presentation. Now it did cover a lot of the questions that came in, and I'll ask them in banks of 3s across a number of incoming questions. So I'll have to skip the names for this sort of exercise. The first one really is just around the ARP guidance of ZAR 25 billion. If you look at assets like IHS, SA Towers, Nigeria localizations, these are fairly big in terms of value in context of the ZAR 25 billion. Is your guidance not too conservative? Can you reconcile this?

Now that's a fair question. And when we did the guidance last year, we said the ZAR 25 billion was against an asset base fairly valued of ZAR 40 billion. So we said there was some coverage for execution risk in that. So I mean, on the ZAR 25 billion, for sure, there is -- and that's why we say greater than ZAR 25 billion. I think the important point there, we not say ZAR 25 billion, we say greater than ZAR 25 billion. And obviously, the material transactions there, IHS, as I said, we're looking to do a sale and leaseback of a significant proportion of our towers. You can do the math on what the fair valuation of that is. We're in process of evaluating that. So we can't express to you what our view is of that. So if you kind of work with us here, we'll be slightly vague on this particular point on asset towers because we have a process underway, and there will be a bidding that will go through it. So for sure, it is a conservative positioning against the fair valuation of all the assets that we see being able to be executed. But I think if we look at the near term, I would prioritize IHS and the SA sale and leaseback as events to watch out for in 2021.

Thanks, Ralph. You've headed off some of the other questions around SA Towers. But I think just in terms of structural separation of towers fiber and data centers, how do you see this in terms of needing a first-mover advantage in terms of infra cost and some time lines around that?

No. Look, I mean, for us, it's important, and we are focusing in the interim, where we've done a bit of work really around the FiberCo and on fintech. And I think on fiber, we realize that there is a significant data demand that is not going to stop and the fiberization of the African continent is going to be with us for some time. You'd have seen in the slides earlier on, we believe there's a minimum investment from MTN that's going to be required over the next 3 to 5 years of $500 million. And we say it's a minimum. But in the way that we deploy that fiber to service our own needs, it creates an opportunity for us to really build an open-access model towards fiber provisioning across the markets. So we think that as we are moving in this direction of more fiber investment, nothing stops us from bringing other third-party investors into a vehicle that enables us to roll out much more faster and in due course, this may be a business that is separately structured and has its own group of investors, of which obviously MTN will remain a big part of. So that work is actually underway, and the team is, as I said, under Jen's guidance, working with Frédéric Schepens. The other one is fintech. As I said, we think that it's important for reasons of being able to expose value. But I'd also argue that where we are today, when businesses become this big, they'll need to be regulated very separately from the core GSM business. And we're seeing some of that play out. Some of you would have seen the pronouncements in Kenya around a review of separating fintech business from GSM. So we had applied our minds already towards this. And obviously, it starts at an OpCo level, and we would look towards -- and it's not a trivial matter but we look towards creating something at a group level. So that's something that we see that we can work on, particularly over the next 3 years. It's not a thing that will happen tomorrow. And that's why we say, Ambition 2025. But in the next 3 years, we certainly see a transformation and an ability to carve out fintech very separately from the GSM. These 2 businesses, and I've got some experience on financial services, they are very different. And I think over time, they have a very different capital profile, different return profile, different regulatory. But we're excited about the opportunity to actually reveal that value.

We'll just stick with South Africa, and you are quite right. Question on South African spectrum. What are your thoughts on the interdict to delay the spectrum auction? And how does that impact on your plans and the case that you have with ICASA in the courts?

Yes. As I give the camera to focus on Godfrey because I anticipated this question. I'd headline that before I give Godfrey the chance to talk. But I'd headline that by saying, we're very committed to a couple of things. One, we are committed to the release of this high demand spectrum as soon as possible. And Godfrey will explain our narrow challenge as part of the litigation process. The second is that we are very committed to find a mediation to resolving this very quickly. We think that there is a national agenda out -- around making broadband accessible to South Africans. And we don't want that to be rolled back. Godfrey has already got 5G sites, so he wants more 5G sites. So let me talk to the buzzer man to actually give us his own views.

Thanks a lot, captain. On the issue of the spectrum, I think the first point is, we can't be commenting a lot on the telecom situation. The most important thing for us is that the urgency to release the spectrum is now. So that's what you're really pushing and working with the ICASA. And of course, our issue with the ICASA is still not addressed. It is very narrow, and we are very clear, we do not want to block or delay the overall award of the spectrum. We believe ICASA can address the issues of opt-in and tiering as quickly as possible without delaying this. What is also important is that ICASA cannot take away the temporary spectrum that we have at the moment because that is what is giving oxygen to the industry. The reason why we are able to carry some extra double traffic on a year-on-year basis. We're able to 0 rate for millions of customers, so they can get easily learn from home, they can get some public service at -- from home. Those things have to continue busy happening. So I think our plea to ICASA is still the same. The temporary spectrum cannot be withdrawn. And secondly, let's quickly resolve the issues so we can substantively award the spectrum and digitize the country.

Thanks, Godfrey.

Thanks, Godfrey. Then maybe just switching to Nigeria. Do you have an update on cash upstreaming year-to-date? And what the situation is in terms of U.S. dollar availability, particularly in the context of higher oil prices?

Yes. I mean the cash upstreaming to date is as at the end of the year. So we got under approximately $18 million in quarter 4 last year, and we haven't had further cash upstreaming from Nigeria. We feel cautiously optimistic where we sit right now. The first is we've seen OMO rates go up. And OMO rates generally attract foreign portfolio flows, which helped to build the reserves. And actually, over the weekend, there's been an interesting intervention by the CBN to provide a bit of a carrot for Nigerians to bring back dollars into the country. And I think many of you would have seen that. So as we assess the situation around some of those measures as well as a bit more buoyancy around oil, we're encouraged, but we balance our encouragement with caution as well. And until we've seen the funds flow, I mean, I think we'll remain with some level of caution. Now for sure, Karl, Modupe and Ismail, some of our key executives in Nigeria, are very focused on continuous engagement with the authorities there. So I wouldn't want to be providing an answer that says we're very bullish, but we are cautiously optimistic that, that process will come through.

Of course, there are questions around the dividend. What are the metrics will the Board look at in terms of guiding the potential dividend policy -- the dividend during the year? And what sort of thinking are you having in terms of the potential policy in a year's time?

Yes. So that's a question I expected, given the dividend statements we've made. So in our consideration for 2021 guidance, we said what do we believe under stress scenarios we can commit to our shareholders under any stress scenario. And we basically worked out is approximately ZAR 2.60. And what informs that is that we see no repatriation risks actually coming out of the South African business. So I think you need to see the ZAR 2.60 in the context of saying, that we see in MTN SA equity free cash flow that's at least ZAR 2.60. So that's why we're putting the underpin of the minimum dividend of ZAR $2.60. Now as I said, we are cautiously optimistic as a company. We're excited about our growth prospects. But when you look at the balance sheet, we look at it very cautiously. Now if our caution is too conservative, and actually, we get the IHS away, the Tower deal is done, our holdco leverage was below -- materially below 1.5x. So we would have met that part of our capital allocation framework, which is the second part. Now we'll have excess cash. And when we have excess cash, we're being very disciplined across our return profile that we have a responsibility to give some of those returns back to shareholders, either as a special dividend or as a share buyback. So what the Board will assess is the execution pace, particularly of the ARP is what will influence our decision to look to more than the minimum ordinary dividend. So those will be some of the conditions. And obviously, if the Nigerian cash now gets upstreamed, then we're in a position of a relative embarrassment of riches. And that's why we have been very clear in our communication that we'll be very disciplined in financial 2021, that if there is excess cash, we will return it to shareholders. We've debated that thoroughly with the Board. And I did ask the Board, as we thought through it, that we do need to communicate very clearly with shareholders because shareholders will hold it to accounts. So I'm very confident I can make that statement that if the year is very strong, there's a very serious consideration of a special dividend or share buyback in calendar year FY 2021.

And then just linked to that, how do you reconcile that with the impact on MTNs like Zakhele Futhi given the dependence on the group dividend?

Now, we'll engage with Zakhele Futhi separately from that decision. We keep these decisions set separate. We want to deleverage faster. So we will engage with the Zakhele Futhi and if they need some interim support, as we've done with them before, we will provide that for sure. Last time, they asked us ZAR 30 million of working capital facility, which we provided them. And when they write to us, we will apply our minds and will support them. They are important part of our B profile, which is super important for Godfrey's business.

A question on Nigeria and the PSB license, should our PSB license not be secured in the next 2 years, does this change your mobile money strategy in Nigeria?

Look, I mean, we remain very engaged, and we remain very focused on being able to activate the fintech opportunity in Nigeria. And today, we are more open to not just the PSB license, but a license regime that enables us. I think over the last 2 years, we are very focused on the PSB, but we're a lot more open to partnerships if the PSB license does not come through. We think the fintech opportunity in Nigeria is very, very significant just given the demographics in that market. But obviously, this is a key priority for Karl Toriola and exposing some of Karl's KPIs for 2021. And I'm sure Karl is listening. This is a material KPI for him to resolve the PSB license or other banking license or structure that enables us to leverage the distribution footprint we already built in Nigeria to roll out financial services. We remain relatively optimistic that will come in the near term.

I think maybe a final question, and then you can round it off with some closing remarks.

You need to ask Sugen some questions. He is standing right up here.

These are all kind of broad strategic questions. I think we've made some important announcements in that regard. So this refers to the fintech opportunity, and particularly in South Africa. What are the opportunities that you see to scale this up? And some of the plans that you have around that.

Yes, Godfrey, if he was to speak, will say, he's lived 2 experiences of fintech not inflecting in South Africa. And as we've said before, with the benefit of hindsight, what those fintech opportunities we're trying to do is to compete with the banking propositions. The way we've positioned fintech in South Africa is basically better than cash. So that allows us to go to communities that are still predominantly cash-based, sparse operators, the more informal economy where actually a lot of cash sits under the mattress, so to speak. That's where Godfrey and Felix and the team have been pushing, and we've seen good growth in a very short space of time. So as we expand that service, we also want to deepen the product range. As I mentioned earlier on, we've got a very nascent relationship with Sanlam. We want to deepen that more broadly in South Africa and beyond the borders. But South Africa remains an opportunity where we think there can be a substantial fintech business in the portfolio. But for sure, that opportunity is not as big as in markets like Nigeria or some of the other markets like Ghana. But it's material enough for Godfrey to put resource and Felix on the boarder team to try and pursue that.

Thank you, Ralph. I think you -- we need to wrap up the presentation, any closing remarks from your side?

No. Thanks to all the investors and MTN-ers watching what was a relatively longer results presentation because we put on a little bit of an insight in terms of how we're looking at strategy. We just want to thank you for spending the time with us. Hope you prefer the 3 p.m. positioning. And again, for many of the investors, we'll talk to you over the next couple of days on our roadshow. Thanks very much, much appreciate it.