MTN Results overview

“MTN Group’s financial results for 2016 reflect the most challenging year in the company’s 22-year history, precipitated by a number of material regulatory, macroeconomic and political challenges experienced across our regions. However, despite these difficulties, the business began to show encouraging first signs of a turnaround.”

Phuthuma F NhlekoMTN Group Executive Chairman

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• Group subscribers increased by 3.3% to 240.4 million

• Revenue increased marginally by 0.4% (2.9%) to R146 894 million

• Data revenue increased by 16.7% (19.7%*) to R39 546 million

• Capex increased by 19.6% (28.7%*) to R34 920 million

Key highlights

“Following the conclusion of the settlement agreement relating to the Nigerian regulatory fine in June 2016, the infusion of new senior management and the appointment of a new Group Chief Executive Officer, the MTN board of directors undertook a deep and fundamental strategic review of the business and its processes to ensure MTN is operating far more optimally in a complex and difficult operating environment.”

Phuthuma F NhlekoMTN Group Executive Chairman

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Financial review

“It is evident that we endured a difficult year, with a number of headwinds, regulatory (macro and political) and operational underperformance in the first part of the year. We are, however, making progress in the Tier One operations while some of our larger markets, including Ghana, Uganda and Ivory Coast, recorded solid improvements in the last quarter of the year.”

Gunter EnglingActing MTN Group Chief Financial Officer

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• Results were impacted by a number of once-off items; Nigerian regulatory fine, MTN Zakhele Futhi, losses from the Nigeria tower co., forex losses, hyper-inflation and losses from digital business and MTN will continue to record losses over the medium term before turning profitable

• Revenue and EBITDA were negatively impacted by currency movements during the year• Reported revenues were flat year-on-year, while on an organic basis growth was a very

subdued 3%, as MTN faced a number of challenges across its operations• The slow organic growth was impacted by the 2% year-on-year decline in Nigerian revenues,

and this was partially off-set by the 5% year-on-year growth in revenues for the South Africa business

• Exchange rates on translation had a 6% positive effect on the reported group EBITDA, although Nigeria’s performance was a key factor in the organic EBITDA being by 19% year-on-year

Financial highlights

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• A strong growth of 44.2% in digital services revenue was recorded, supported by lifestyle and mobile financial offerings. MTN Mobile Money accounts for 20.2% of total digital revenue

• MTN Games Club, MTN’s premium gaming proposition, grew significantly and is now active in nine markets with a total of 5.4 million subscribers

• MTN continues to be the leading distributor of digital music in Africa. Our streaming product recorded 2 million paying subscribers

• Despite Jumia, MTN’s e-commerce venture with AIH and MEIH, experiencing slower growth in the Africa business largely on the back of Nigeria’s slowing economy, by entering into new markets (Morocco and Ivory Coast), it was able to deliver nominal growth

Digital growth

• MTN Mobile Money registered customers grew by 18.4% to 41 million and its revenue increased by 50.7% to R2 829 million

• Micro-lending service, MoKash, launched in Uganda and Zambia. Uganda saw over 140 000 MoKash loans disbursed in December 2016 alone

• MTN is planning further MoKash pilots in Rwanda, Ivory Coast and Ghana• aYo soft launched two mobile micro-lending products in Uganda

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Mobile financial services

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MTN South Africa

• MTN South Africa showed a positive turnaround in the second half of the year, benefitting from improved 3G and LTE network quality, as well as aggressive sales of smartphones

• South Africa’s growth was supported by 19% growth in handset revenue while voice revenue declined by 1%

• Subscriber base increased by 0.6% to 30.8 million, driven by the prepaid segment• Post-paid subscribers declined by 1.1% to 5.2 million, largely impacted by network quality

challenges experienced and systems, and customer service issues• Total revenue increased by 4.7% to R41 922 million mainly as a result of device revenue• Service revenue increased by 1.9% driven by good date revenue and data revenue increased by

11.4% • EBITDA declined by 0.5 pp to 32.9%• Fibre to the Home (FTTH) remains a priority with approximately 13 000 homes passed for

the period

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MTN Nigeria

• Despite the impact of regulatory challenges and a disadvantaged competitive position as a result of subscriber disconnections and the withdrawal of regulatory services in the first half of the year, MTN Nigeria continued to improve its competitive position throughout 2016

• Network quality remains a priority• Subscriber base increased by 1.2% to 62.0 million• Market share grew to 48.0% from 44.8%• Active MoMo subscribers increased by over 100% to 1.6 million • MTN Nigeria was voted the Most Valued Brand in Nigeria for 2016 in the Top 50 Brands Survey

measured on key indicators, such as customers’ brand awareness, network quality, market category leadership, innovation, spread and corporate social responsibility

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Other operations

• MTN Irancell and MTN Ghana reported a strong performance driven by data revenue growth• MTN Irancell benefitted from the country’s youthful demographics and higher smartphone

penetration • MTN Ghana’s data revenue grew by 65,7%, driven by expansion of network quality and

coverage, increased uptake of low-cost smartphones and the launch of 4G• MTN Uganda, MTN Cameroon and MTN Ivory Coast showed improved momentum towards

the fourth quarter of 2016 following a competitive environment and subscriber registration challenges

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IGNITE: MTN’s transformation initiative

• At the end of 2016, MTN’s transformation initiative, IGNITE, was launched• IGNITE is about shaping the future of MTN’s two biggest operations, MTN South Africa and

MTN Nigeria, by proactively introducing special measures to accelerate business and financial performance

• These measures, which have aggressive targets, will make MTN more agile and our business more sustainable, efficient, innovative and profitable

• IGNITE will be rolled out progressively to all operations, ensuring a well-coordinated approach throughout MTN, enabling operations to execute their mandates effectively and deliver excellence in customer experience and value propositions

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Looking ahead

• MTN Group continues to work towards achieving its vision of ‘leading the delivery of a bold, new digital world to its customers’

• Despite the recent disruptions in the market, Africa is still expected to be a key growth region over the medium to long term

• The execution of IGNITE will focus on the transformation of MTN’s operational model and accelerating growth of new revenue streams

• E-commerce ventures (AIH, MEIH and IIG) are expected to continue strong growth

Thank you