Pompe de filtration piscine : comparatif – promotion – guide achat – Edited Transcript of TKG.J earnings conference call or presentation 22-Jun-20 8:00am GMT

?>
  • Moover : Moteur pour abri de piscine jusqu'a abri - A
    Moover : Le moteur pour abri piscine ! Vous avez investi dans un abri de piscine mais quand il s’agit de profiter de votre piscine, il vous faut l’ouvrir et le refermer une fois la baignade terminée. Si vous êtes à la recherche d’une solution pour motoriser votre abri de piscine, alors vous êtes au
  • Moover : Moteur pour abri de piscine jusqu'a abri - C
    Moover : Le moteur pour abri piscine ! Vous avez investi dans un abri de piscine mais quand il s’agit de profiter de votre piscine, il vous faut l’ouvrir et le refermer une fois la baignade terminée. Si vous êtes à la recherche d’une solution pour motoriser votre abri de piscine, alors vous êtes au
  • Moover : Moteur pour abri de piscine jusqu'a abri - B
    Moover : Le moteur pour abri piscine ! Vous avez investi dans un abri de piscine mais quand il s’agit de profiter de votre piscine, il vous faut l’ouvrir et le refermer une fois la baignade terminée. Si vous êtes à la recherche d’une solution pour motoriser votre abri de piscine, alors vous êtes au
  • Volet immergé piscine moteur dans l'axe Roussillon II
    Le volet immergé piscine ROUSSILLON moteur dans l'axe est la solution idéale pour couvrir et sécurisé sa piscine. Le moteur est situé dans l'axe. C'est le modèle idéal quand la piscine est déjà en eau. Ce volet immergé est fabriqué en France, il est aussi conforme à la norme NF P90-308. Prix à part
  • Robot piscine Zodiac OT 3200 Tornax - TILE
    Robot piscine Zodiac OT 3200 Le robot de piscine électrique Zodiac Vortex OT 3200, il permet de nettoyer le fond et les parois pour votre piscine jusqu'à 9 x 4 m. Il permet grâce à ses brosses actives de décoller les débris pour être aspirés grâce à un puissant moteur. Toute la technologie ZODIAC à
  • Robot électrique piscine BWT Ligne B - B200
    Le robot BWT Ligne B200 : MOTEUR ULTRA PUISSANT + FILTRE 2 MICRONS Robot B200 : Le Les robots nettoyeurs BWT ligne B conjuguent performance, esthétique, fonctionnalité et petit budget. Et surtout, ils possèdent un atout qui fait toute la différence : leur filtration ultrafine BWT. Robot BWT B200 :
  • Robot piscine BWT connecté : LadyBOT 200
    Le robot BWT LadyBOT 200 BWT propose un nouveau robot connecté pas chère avec les caractéristiques suivantes Smart Navigation, gyroscope, double moteur d'entrainement, Brosse active PVC, double filtration top access : Nettoyage fond parois et ligne d'eau, longueur de bassins 12m,Des cycles de netto
  • Pompe piscine STA RITE PENTAIR de 12 m3/h ( 3/4 CV ) - Triphasé
    Pompe piscine STA - RITE modèle P-STR La pompe piscine STA - RITE est la pompe la plus haut de gamme, résistante à toutes épreuves, des rendement surpuissant, un moteur ultra silencieux. Le moteur bénéfice de la technologie PENTAIR éprouvé et efficace renforcé en fibre de verre, une turbine haute p
  • Pompe piscine STA RITE PENTAIR de 12 m3/h en mono ( 3/4 CV )
    Pompe piscine STA - RITE modèle P-STR La pompe piscine STA - RITE est la pompe la plus haut de gamme, résistante à toutes épreuves, des rendement surpuissant, un moteur ultra silencieux. Le moteur bénéfice de la technologie PENTAIR éprouvé et efficace renforcé en fibre de verre, une turbine haute p
  • Pompe piscine STA RITE PENTAIR de 18 m3/h (1.5CV ) - Triphasé
    Pompe piscine STA - RITE modèle P-STR La pompe piscine STA - RITE est la pompe la plus haut de gamme, résistante à toutes épreuves, des rendement surpuissant, un moteur ultra silencieux. Le moteur bénéfice de la technologie PENTAIR éprouvé et efficace renforcé en fibre de verre, une turbine haute p
  • Pompe piscine STA RITE PENTAIR de 8m3/h en mono ( 1/2 CV )
    Pompe piscine STA RITE modèle P-STR La pompe piscine STA RITE P-STR est la pompe la plus haut de gamme, résistante à toutes épreuves, des rendement surpuissant, un moteur ultra silencieux. Le moteur bénéfice de la technologie PENTAIR éprouvé et efficace renforcé en fibre de verre, une turbine haute
  • Pompe piscine STA RITE PENTAIR de 16 m3/h (1CV ) - Triphasé
    Pompe piscine STA - RITE modèle P-STR La pompe piscine STA - RITE est la pompe la plus haut de gamme, résistante à toutes épreuves, des rendement surpuissant, un moteur ultra silencieux. Le moteur bénéfice de la technologie PENTAIR éprouvé et efficace renforcé en fibre de verre, une turbine haute p
  • VIP-POOL Pompe piscine sans pré-filtre série MGD 2.00 CV Mono
    La pompe piscine à gros débit sans pré-filtre série MGD, idéale pour une utilisation en filtration ( skimfiltre ) ou petit pompe de nage à contre courant. Cette gamme possède une puissance moteur de 0.5 à 3 CV pour un débit moyen de 14 à 41 m3/h. Pompe auto-amorçante jusqu'a 50 cm au dessus du nive
  • VIP-POOL Pompe piscine sans pré-filtre série MGD 3.00 CV Mono
    La pompe piscine à gros débit sans pré-filtre série MGD, idéale pour une utilisation en filtration ( skimfiltre ) ou petit pompe de nage à contre courant. Cette gamme possède une puissance moteur de 0.5 à 3 CV pour un débit moyen de 14 à 41 m3/h. Pompe auto-amorçante jusqu'a 50 cm au dessus du nive
  • VIP-POOL Pompe piscine sans pré-filtre série MGD 0.75CV Monophasé
    La pompe piscine à gros débit sans pré-filtre série MGD, idéale pour une utilisation en filtration ( skimfiltre ) ou petit pompe de nage à contre courant. Cette gamme possède une puissance moteur de 0.5 à 3 CV pour un débit moyen de 14 à 41 m3/h. Pompe auto-amorçante jusqu'a 50 cm au dessus du nive
  • Pahlen Nage à contre courant piscine Jet Swim 2000 : inox
    Nage à contre courant piscine JET SWIM 2000 : PAHLEN Avec une puissance de moteur de 4 kW et une capacité de pompe de 71 m3, elle est destinée au sportif qui veulent développer leur force et leur forme physique. Mettez en service votre Jet Swim en appuyant sur un bouton sur la façade en inox 316L.
  • Enrouleur PRESTIGE auto. bâche pour piscine 4 m
    Enrouleur Prestige + moteur de 3 à 7 m Système autonome et télécommandé adaptable à l'enrouleur prestige 3 à 7 m m de la gamme DISTRIPOOL. Fini les enroulements manuels de vos couvertures d'été. Installé en moins de 2 minutes sur votre enrouleur, un simple click sur la télécommande permet l'enroule
  • Enrouleur PRESTIGE auto. bâche pour piscine 7 m
    Enrouleur Prestige + moteur de 5 à 7 m Système autonome et télécommandé adaptable à l'enrouleur prestige 5 m + Prestige 7 m de la gamme DISTRIPOOL. Fini les enroulements manuels de vos couvertures d'été. Installé en moins de 2 minutes sur votre enrouleur, un simple click sur la télécommande permet
  • Enrouleur PRESTIGE auto. bâche pour piscine 3 m
    Enrouleur Prestige + moteur de 3 à 7 m Système autonome et télécommandé adaptable à l'enrouleur prestige 3 à 7 m m de la gamme DISTRIPOOL. Fini les enroulements manuels de vos couvertures d'été. Installé en moins de 2 minutes sur votre enrouleur, un simple click sur la télécommande permet l'enroule
  • Enrouleur PRESTIGE auto. bâche pour piscine 5 m
    Enrouleur Prestige + moteur de 5 à 7 m Système autonome et télécommandé adaptable à l'enrouleur prestige 5 m + Prestige 7 m de la gamme DISTRIPOOL. Fini les enroulements manuels de vos couvertures d'été. Installé en moins de 2 minutes sur votre enrouleur, un simple click sur la télécommande permet
  • Enrouleur PREMIUM auto. bâche pour piscine 4 m
    Enrouleur PREMIUM + moteur de 4 à 7 m Système autonome et télécommandé adaptable à l'enrouleur PREMIUM 4 à 7 m m de la gamme DISTRIPOOL. Fini les enroulements manuels de vos couvertures d'été. Installé en moins de 2 minutes sur votre enrouleur, un simple click sur la télécommande permet l'enrouleme
  • Enrouleur PREMIUM auto. bâche pour piscine 7 m
    Enrouleur PREMIUM + moteur de 4 à 7 m Système autonome et télécommandé adaptable à l'enrouleur PREMIUM 4 à 7 m m de la gamme DISTRIPOOL. Fini les enroulements manuels de vos couvertures d'été. Installé en moins de 2 minutes sur votre enrouleur, un simple click sur la télécommande permet l'enrouleme
  • Enrouleur PREMIUM auto. bâche pour piscine 5 m
    Enrouleur PREMIUM + moteur de 4 à 7 m Système autonome et télécommandé adaptable à l'enrouleur PREMIUM 4 à 7 m m de la gamme DISTRIPOOL. Fini les enroulements manuels de vos couvertures d'été. Installé en moins de 2 minutes sur votre enrouleur, un simple click sur la télécommande permet l'enrouleme
  • Pompe piscine à vitesse variable Noxplus de Espa
    + Excellent rapport qualité / prix + Très bonne qualité de filtration  + Économies garanties + 3 ans de garantieCaractéristiques techniques  Corps de pompe, flasques d'aspiration et de refoulement, turbine et diffuseur: TechnopolymèreAxe moteur: Inox AISI 431Garniture mécanique: Graphite/alumineCarcasse moteur: AluminiumJoints: NBR/EPDMIsolement du moteur: Classe FProtection du moteur: IPX 5T° maxi du liquide: 40°CProtection thermique incorporée: OuiService continu: Oui La pompe Noxplus est livrée avec : - 2 mètre de câble électrique avec prise moulée type F- Des raccords union Ø 50 mm Bon à savoir : La fabrication de la Noxplus repose sur la base d'une Nox 100-18 M, elle peut donc s'installer en lieu et place des NOX 75-15, 100-18 et 150-22, de toute la gamme de pompes Silen et des Silen SI 15 et 18. 

Pretoria Jun 23, 2020 (Thomson StreetEvents) — Edited Transcript of Telkom SA SOC Ltd earnings conference call or presentation Monday, June 22, 2020 at 8:00:00am GMT

* Tsholofelo B. L. Molefe

Sipho Nkosinathi Maseko, Telkom SA SOC Limited – Group CEO & Executive Director [1]

Good morning, everybody, and welcome to the Telkom Annual Results presentation for the year ended 31st of March, 2020. I’ll start, firstly, by framing the sort of environment that we operated under in the last year. It’s been a very challenging economy. However, the business has been very, very resilient despite those issues in the economy and secondly, the global pandemic, COVID-19, that we started to experience towards the latter part of the financial year. On the other hand, we also had the Competition Commission inquiry, which actually affirmed that the South African market has no effective competition, and there were no findings against Telkom Mobile. Secondly, there was a bit of policy road map that was emerging, the policy on high demand spectrum. We are now awaiting for the regulator to give effect to the policy. However, we’ve seen some developments in the last couple of months where the market proceeded with some kind of spectrum sharing arrangements that haven’t changed the nature of spectrum access and also, in April of 2020, mobile service providers were granted temporary spectrum licenses to ease network congestion during the lockdown. And as Telkom, we benefited from the assignment of temporary spectrum assignment.

Obviously, the permanent decision on spectrum should take the market structure into account, in our view, so as to introduce greater competition, which will result in increased quality and a decrease of costs for the consumer, and it’s an area that we will watch very, very intently as a company to make sure that the spectrum, the permanent spectrum allocation does not have the net result of making those that are strong, even stronger and make those that are weak, even weaker. And it’s a very, very important development on our side.

We’ve, obviously, been under the froze of the COVID-19 pandemic over the last couple of months. Telecommunications was declared an essential service in South Africa. And we had a response that was divided into 4 parts. Firstly, our employees. We really focused on making sure that our employees remain the #1 priority in terms of health and safety. Just before the lockdown was declared, we had about at least 80% of our employees working from home. At the peak of the lockdown, we had up to about 94% of our employees working from home.

On the customer side, we were able to continue to serve our customers during our lockdown despite the fact that most of the stores were closed, but we scaled up digital platforms and relaunched some of the copper-related products and services in order to enable people to continue to have access to broadband.

We’ve actually been seeing a very, very huge surge in traffic, both on the fixed side of the network and also on the mobile side of the network. Luckily, our network is scalable. We have the right footprint and also by getting additional spectrum, it helped us in managing congestion in some sites. And I’ll share with you some of the COVID-19 stats as I unpack our infrastructure theme in terms of investment.

And last, but not least, making sure that we contribute to the country and the efforts of the country. We, obviously, support all of the measures that government has introduced to contain the virus. We’ve worked with the department to develop and launch the novel track and trace system in partnership with the NICD and the Department of Health. And also, we’ve supported the Red Cross in terms of making sure that all the frontline health care workers continue to have the right support to be able to contribute going forward.

We’ve also made some of our facilities available as areas for the department and the various provinces to be able to isolate people who may not have the ability to self isolate. And it’s actually deepened the way in which we collaborate with government to make sure that we can improve our response as a country with regards to COVID-19.

So I’ll start just by giving you a couple of business highlights in terms of our performance for the year that’s just gone past. First and foremost, we’ve seen very, very strong operational performance despite the challenges, and the highlights are as we have captured in our slide. Our mobile customers increased by about 24% in the period under review. Mobile data traffic grew by almost 70%. Our cloud services in data centers grew 10%. We’ve also seen growth in our fixed line broadband traffic, which grew by about 11.5%. And we’ve also seen much improvement in how we connect customers to fiber with our connectivity ratio now at about 48% at the end of the year.

And I think, in this month of May, we’re probably closer to 50%. And then on our Mast & Tower side, we’ve continued to see increase in our tenancy ratio of about 1.3x, including the loading effect.

I’ll then focus on what are the key strategic themes that underlie our performance. And those are 4: It is our investment in infrastructure, it is broadband leadership, it is the evolution of the fixed voice business, and obviously, a sustainable mobile business. So those 4 areas, I’ll now move forward to unpack them.

In so far as our infrastructure investment, we continue to focus on how do we build what we call a data-led network. You’d remember, over the last 5 to 7 years, we have been singularly focused in making sure that we grow our position in terms of data leadership, and therefore, how we design the network, fixed and mobile, being an all IP network should enable us to be prepared for data growth that we anticipate will still come going forward.

In full year 2020, we increased the number of mobile sites that were integrated in slides as well that have fiber backhaul, and we’ve also done a massive amount of MIMO upgrades in order to enhance our coverage capabilities. Just when COVID-19 started, we saw an unprecedented surge in network utilization, driven largely by data-centric value propositions that we had. Data consumption increased just in the last 2 weeks of March by over 35% viewed in context. It’s the sort of typical growth that we saw in the 11 months between April of 2019 and about February of 2020. So therefore, just seeing a growth of about 35% just in over 2 weeks begins to actually indicate to us we are now starting to reach an inflection point where data consumption will become predominantly how people learn, how people work, how people shop, and we think that we have the right infrastructure that we’ve put in place.

Peak data utilization increased by more than 20% just in over 2 weeks, viewed in context, once again. The typical 11-month peak utilization growth between April of 2019 and February is around 47% compared to just the 20% growth that we saw in the last 2 weeks. So all of that actually indicates that we have a scalable network, we have a flexible network, such that even when there was that surge in traffic, our network was able to cope during that time.

I’ll talk a little bit about spectrum and how we see the spectrum game. Obviously, you will recall that there was temporary spectrum that was allocated just when the pandemic broke. And one of the things for us that is very, very key is that in terms of how we think about spectrum and how we use it, we want to really make sure that the high demand for capacity in residential areas during lockdown has had the effect of restricting people to their homes, and that was one of the factors that we took into account in how we manage the traffic patterns and the deployment of spectrum.

Secondly, there were high congestion levels in pockets of the network, which we were able to utilize that spectrum so that we can be able to alleviate those congestion sites so that the network can function at full capacity during that time.

Thirdly, actually, with the localization of subscribers, largely often in doors because of the lockdown, the impact on quality of coverage becomes very, very crucial, and which is one of the factors that we took into account in making sure that we, as Telkom, we are able to fully leverage the spectrum that is there to enhance the broadband experience of our customers.

In the past, if you remember, that we never had one — treb 1 with spectrum so we configured the existing 1,800-megahertz spectrum, which is normally for both coverage as well as capacity to be able to give us that benefit. And we were now able to really use the temporary spectrum, especially at 700 and 800 to address some of the coverage issues. And we then use 2,600 and 3,500 megahertz to address the capacity issues. In fact, the video that we played is an indication of the 5G trial that we ran at 3,500, which is one of the spectrum holdings that we have. So obviously, the intention is that after 3 months post lockdown or end of November, the spectrum will be returned. But during this time, the benefit to the market has been immense. We’ve been able to ease congestion, and we continue to play that role in collaboration with government, obviously.

So I’ll move now to the next component of our infrastructure investment. As you may well know, we have a Mast & Tower portfolio that is a total of about 6,500 sites. Now those 6,500 sites is a combination of both sites that are productive and sites that are not productive. And of the productive portfolio that we have, we have about 3,650 with a tenancy ratio of about 1.3x.

Now the productive portfolio, there’s still quite a lot of room for us to be able to grow it. It consists of about 1,100 sites that are core mature towers and about 2,500-or-so sites, which give us further opportunity to grow. So when you look at how our Mast & Tower business has been able to grow in the last couple of years, it’s actually largely been delivered by about 1,100 sites, and we still see opportunity for growth in the balance of about 2,500 sites, which will further enhance our leadership in the Mast & Tower business.

Over and above that, we’re looking at other organic revenue growth initiatives that we are focusing on. To be able to add an additional 2,000 towers that are new in this portfolio by 2023. One of the things that we have seen, obviously, with COVID-19 pandemic and the growth in data traffic is that one of the necessary twins of having the right infrastructure is to have the appropriate data center infrastructure that integrates and works very well with the connectivity infrastructure. So our 10 geographically dispersed data centers that are properly paid are interconnected with our high speed broadband. And that enables us to give appropriate value proposition to all those that have large applications that they want to run, that have content that they want to store on our data centers, and we can have that value proposition that we can deliver to them. Our data centers as well are fully managed with state-of-the-art security controls that proactively protect the integrity of all of the digital assets and have the necessary accreditations. And that is one of the core strategic assets that we have, and as an asset class, it really makes us very, very distinctive.

The BCX cloud strategy is built on an architecture of hybrid cloud principles, which means that we can run multiple cloud platforms, whether it’s Azure, whether it’s AWS or other cloud providers. And this enables us to take a workload fest approach and to determine the best hybrid cloud solution for our customers. As many enterprises are beginning to work from home, many of them are looking to move to digital services. We’re finding ourselves beginning to work with them to provide the right cloud solutions for those customers.

Our customers as well are moving to utility-based business models, where applications and services are consumed on digital platforms. And one of the unintended consequences, for instance, of COVID-19 has been to accelerate the migration to these digital platforms virtually by all sectors in the economy. And our data centers, therefore, come in extremely handy to be able to provide that capability for our customers.

Last, but not least, the capability to host and manage these platforms exists in the current data center footprint and a very, very critical enabler for the next wave of innovation that we are looking to accelerate. We’re doing a couple of things, for instance, on the health side around track and trace, case management. We’re doing a couple of things around the retail side, financial services, content hosting. So this particular infrastructure enables us to be able to achieve that. We have in excess of about 12,500 square meters of Tier 3 — Tier 4, rather, national data center capacity. We have very, very high levels of operational standards with an uptime of about 99.99%, and this begins to really set us up. As the world becomes more and more converged, essentially, we would have the spectrum infrastructure and the spectrum capacity would have Mast & Towers and then would have data centers that enabled us to participate effectively. All of this at the heart of it is built on a very, very resilient network. And actually, the slide that you see, if you read it left to right, on the left-hand side are largely the products and the services that customers acquire. They acquire a fiber service from home, they acquire a metro ethernet service if they’re a business. They acquire a DSL service for those that have copper. They get an LTE service for those that are using wireless broadband. And with the investment that we have been making over the last couple of years in terms of building out a packet optical transport network, it means that now we have a flexible network, fully meshed, very, very flexible, very, very scalable that enables us to carry huge amounts of traffic within this network.

And this network is essentially designed to handle large volumes of traffic with seamless failover and load balancing capabilities.

Just by the end of March 2020, we added about 7 terabits per second of capacity onto our core packet optical transport network. So that is massive amount of capacity. Average traffic consumption increased from about 94 petabytes prelockdown to about 127 petabytes, which is a 33% increase to date. And what were the main drivers of traffic that we saw over the period? Largely, these were digital services, so streaming services. You see things like Netflix and YouTube really, really driving high-traffic and bandwidth consumption. DSTV, the streaming component of that, working from homes or conferencing applications, whether it’s Zoom or Teams or any other applications that were there. And we saw that traffic really begin to grow during the lockdown. And it remains very, very high. And it may well be that as a country and as an economy, we’ve now reached a very, very interesting inflection point in terms of the role that broadband will start to serve in a whole lot of our daily activities. We implemented upgrades onto the network proactively and early, so that helped. And we also upgraded speeds for 3 months, which was effective on the 1st of May of 2020. So this is the other component of our theme of infrastructure investment. So building a resilient network, making sure that you’ve got the right meshed data centers, having the right infrastructure in terms of Mast & Towers, and last but not least, having the right spectrum assets that you can deploy very, very smartly to be able to prepare yourself for a data-led weld going forward. And it is with those 4 infrastructure themes, which, in my view, actually gives me confidence to say, for Telkom, we are ready for broadband leadership going forward. Because it is that — those investments that we made, which, in our view, have positioned us for the 2020s, which we think data growth will start to accelerate going forward. So infrastructure investment is, obviously, there for the first theme.

The second one is around broadband leadership. And I’ll break it down a little bit in terms of what does that mean? So I’ll start with mobile broadband traffic. Mobile broadband traffic has continued to grow enormously in the last financial year. We saw the growth of about 70% over the period. What supported this growth? Largely supported by about 8.2 million customers who are on mobile broadband, which is an increase of almost 30% over the period.

We also refarmed our 1,800 spectrum and having refarmed it, we’re beginning to see the right results that are coming across with more and more smartphone customers coming on to the network. We’ve grown our smartphone base, our smartphone customers rather by about 28% in the period. And now we have at least almost 7 million smartphone customers on the network, which means that we’re providing the right speed, the right quality, the right latency, our coverage is beginning to grow. We have the right backhaul of our Mast & Towers because we mostly use fiber. And that has been, in my view, a very, very focused strategy that we continue to execute on.

In terms of fixed high speed broadband, we continue to also see that growth coming through. In terms of just broadband consumption, the fixed line broadband data grew at about 11.5%. And this growth actually comes despite the fact that we’ve had almost a 20% decline in terms of the number of lines of connections, largely associated with the old copper as customers are migrating either to fiber or customers are migrating to LTE. The traffic is growing even when you have a net number of fewer lines. And actually, those 2 metrics, wireless broadband growth and fixed broadband growth, begins to say that actually, now we are at the beginning of a high-growth broadband era, which will start to replace voice, whether it’s fixed voice, whether it’s mobile voice, the view that we are taking is that more and more data will become the new voice, and it will be a lot more larger than that.

We then have what we would call the fiber ecosystem. And leadership in fiber, for us, is very, very crucial. Nationally, we have at least 164,000 kilometers of fiber that we have deployed, and we continue to expand that network, make sure that we have the right national coverage, we have the right metro coverage, and we have the right local coverage. And that particular expansion, you’ll continue to see that because as data traffic grows, and as enterprises begin to operate largely of digital platforms, they will depend a lot more on the extent of the fiber infrastructure that you have, number 1. Number 2, it will also depend on the scalability of that fiber infrastructure, how much more capacity can it take with very minimum incremental investment. Thirdly, the flexibility of that fiber ecosystem, the extent of the failover that is there, how meshed is it, what alternative routes are you able to provide with other customer feeling any impact.

We’ve connected at least 7,700 base stations, which is an increase of about 10% in the year, which is base stations that we are now using fiber as a backhaul. Those would be our own, but also for other mobile network operators, so that they’re able to carry a lot more data traffic. Our number of homes that we have passed with fiber has slightly increased to almost 0.5 million, and you’ll start to see the acceleration of that going forward. And the reason why you see a slightly marginal growth on the homes passed, it’s because we focused a lot more on making sure that we not just pass the home, but we connect the home. And hence, our FTTH connectivity rate improved from 38% last year to 48% this year, which means that we’re starting to even accelerate monetizing that investment that is on the ground to make sure that we can shorten the payback period and start remunerating the capital. Fiber to the Business also grew about 26% in the last period. This represents a massive growth of our flagship ethernet data services across the network. So therefore, the fiber ecosystem, for us, remains very, very fundamental in how we think about the future. Making sure that our national footprint has more and more fiber, making sure that as many of our base stations as possible, use fiber as backhaul making sure that we connect as many homes as we can to fiber, those that have the service available and making sure that as many businesses as we can also have access to the fiber because that is the foundation to be able to consume digital services.

I’ll speak a little bit about the evolution of fixed voice. As you would have seen in our numbers, the decline in fixed voice has had an impact in terms of our EBITDA and our PAT. And this shift from legacy to new generation, such as fiber and LTE, these are new sources of revenue that continue to grow, but we still cannot avoid the — seeing the impact of the decline of fixed voice in our numbers. So part of what we have seen is that in terms of data solutions and how they’re evolving, legacy data solutions continue to decline, and this is made up of copper-based services, largely like Diginet. We continue to see a steady decline in those products. Ordinarily, therefore, those would be higher margin because the investment and the payback would have been long achieved. But we are seeing the next-generation ethernet services also beginning to grow. Unfortunately, they are still coming off at higher margins, but we continue to see these margins improving every year as we are getting better capital productivity as we’re optimizing the costs we can see that impact in terms of margins. And hence, just for this year, we’ve seen an increase of almost 20% in the new generation ethernet technology, which essentially was offsetting the decline of about 20% with legacy technology largely on the enterprise side.

And if you look at the broadband side, we’ve seen that our fiber connections continue to grow. They grew at about 33% in the period. And good old cooper is hanging in there, and it continues to play a key role. It’s high margin. We’re looking to grow the margins of fiber as fast as we can so that having passed the revenue offset inflection point about 2, 3 years ago, where our new service revenues now are beginning to contribute a lot more to our legacy services revenue, we are now targeting and aiming that over the next 18 months or so, the EBITDA inflection point begins to happen, where our margin contribution from new services begins to offset the margin decline on legacy services.

This is the evolution of the revenue mix of the company over the last 7 years. If you go back to 2013, 56% of our revenues came from fixed voice. So fixed voice had a massive contribution at the in time. And if you look at what it’s contributing now, it’s contributing roughly about 20%. So in essence, I can confidently say that we’ve been able to derisk the role that fixed voice has played in our financials over the last 7 years. We’ve been able to grow the new services revenues. We are improving the margins as aggressively as we can so that we can get through that margin inflection point, where it doesn’t matter anymore. And as I indicated earlier on, the revenue inflection point, we actually reached it a couple of years ago, where the growth from new revenues streams offset the decline in the legacy revenue streams.

At EBITDA level, the growth in new revenue streams is not yet — the margins are not sufficient enough to offset the impact at group EBITDA level. And in our overall capital productivity and cost transformation, we’re actually hoping to reach that inflection point at EBITDA level over the period that I have described.

So what is, therefore, our focal point? Our focal point is that the focus on sustainable cost management continues. And we look at all classes of cost so that we can be able to close the gap that is being caused by the decline in fixed voice revenues. What is, however, beginning to be pleasing, and you’ll see when [Psholo] takes us through the mobile — the mobile performance, that, there, actually, when the margins are beginning to get a lot more stronger. If you look at the contribution of BCX, their margins are beginning to get a lot more stronger. So at a revenue level, mobile now is now one of the big contributors to our revenues. IT is a big contributor to our revenues. Fixed data is now a big contributor to our revenues. And we have a sufficiently derisked venue pool. And we are improving on a sufficiently derisked margin pool to make sure that we have a stability in terms of performance and returns going forward. And it’s all of the themes that I’ve taken you through, which are setting us up to be credible contenders of the data-led world and how we play to win during that time.

There’s also the evolution of skills. We had a restructuring program in 2020. Roughly about 2,200 employees opted to take this particular option. And of those employees, at least 75% of them actually took voluntary early retirement. So as the technology changes, we’re also finding that we have an opportunity as well to reshape the skills base of the company. We have an opportunity to ensure that the new skills that we need to be able to win in the 2020s is where we focus on, and we can then be able to find a way in which the skill — the technology that is on its way out, most of those people are nearing retirement anyway. We give them an opportunity to leave the company with dignity, and we give them options to be able to leave earlier, thus taking our costs down and thus beginning to assort the fixed cost base. We took a charge of about ZAR 1.2 billion in the year under review, which is one of the reasons why our overall reported numbers are the way that they are because we have taken that provision upfront.

I’ll speak a little bit about mobile. Mobile is the key driver of growth. And going forward, we see it as the sort of spearhead in terms of how we’re going to drive growth going forward, both on the mobile side, but also on the LTE side.

So what did we see in the last year? In the last year, what we saw is that service revenue growth continues to grow. It grew about 55% off a higher base. And we believe that actually this growth is really predicated on the CapEx investment that we have made, but also the choices and the decisions we made early on to make sure that we build an all IP network, we lead in data, and we disrupt voice, and that strategy continues. And one of the reasons why you see the growth that is there is because that strategy remains absolutely potent. In terms of where we are. So 54% or so service revenue growth. Our fully allocated EBITDA grew by almost 80% to ZAR 2.2 billion, with an EBITDA margin of about 15%. The team has really, really done well. We continue to focus on improving that EBITDA margin, whilst we grow. So as we achieve scale, efficiency and cost is very, very important. How do we grow profitably, and how do we grow efficiently so that the desired end state of the EBITDA margins that we are looking at, we are able to achieve them.

The network investment was about 22%, so invested about ZAR 3.7 billion in the current year. And we can see the value of that investment. The service revenue is still showing up. The costs are being managed a lot better. Our footprint is growing. We grew our footprint almost 15% and also with a substantial capacity upgrade. And that is the one leg in our broadband thrust that we continue to focus on, really making sure that mobile shows up, and I think it showed up very, very strongly. We also focused a lot on the quality of the customers that we acquire. The strategy is very, very sustainable, acquire quality customers, improve on the trends that you had previously. So we’ve seen an increase of about 24% in our subscriber base to about ZAR 12 million, with a blended ARPU of about ZAR 91 billion. We’ve seen a ZAR 1.6 million increase on our prepaid base to about ZAR 9.4 million with a subscriber ARPU of about ZAR 65. So that’s been the engine, working with the right channels, making sure that we work with the right distributors, we have the right economics that are balanced. We support those that help us acquire customers that will last longer and that has been very, very crucial for us.

Our postpaid base grew by about 37% with an ARPU of about ZAR 188 or so that is also holding in the right way. And one of the new trends we saw just with the lockdown on COVID is the extent of companies and enterprises that we’re looking to connect their customers with high speed broadband, whether LTE or fiber, and that begins to actually provide us an opportunity to penetrate the enterprise market with the right data services as also they begin to look at flexibility to enable some of their employees to work from home, enable them to remain productive and yet, at the same time, give them good quality broadband as service.

Roughly about 70% of our customers are data customers. And for us, that is very, very crucial. And we’ve seen this increasing by 28%. So our focus on making sure that data is the area of growth, we don’t focus on mobile voice at all. We’re managing almost the last phase in the decline of fixed voice and make sure that we put in place a super duper capability, informed by the themes around infrastructure, so network, data centers, Mast & Towers and spectrum. And also making sure that all of that is built around broadband leadership going forward.

And the mobile business strength is data, data, data. As I’ve indicated, it’s a data-led network, which, from the onset, the — it started very, very painfully because the data growth was not as dominant, mobile voice was still a very, very dominant value proposition, which had high margins. And I think we’ve set the course, and I think we’ve built a very efficient network. We continue to expand it. Secondly, it’s around spectrum. And that is why for us spectrum is super important so that not only do acquire it, but we use it in a way that enables us to absolutely break away in terms of our ability to offer data-led propositions. Thirdly is to backhaul as many of our base stations with fiber as we can because as customers are looking to stream, as customers are looking to work from home, there is no way that you will be able to do that if you don’t use fiber. If you’re still using microwave as backhaul, it is very, very intensive. It decimates bandwidth. And for us, that’s a focal area. And we’ve seen some of the outcomes. 70% of our customer base uses data. So that’s good. We’re looking to grow that. And our broadband-led propositions are pervasive across all of our connectivity products and services. So I’ll take a pause now and ask Tsholo to come and take us through the detail in the financial overview, and then I’ll come back to wrap it up. Tsholo, over to you. You’ve got your — I won’t touch it. I’ll leave it you.

——————————————————————————–

Tsholofelo B. L. Molefe, Telkom SA SOC Limited – Group CFO & Executive Director [2]

——————————————————————————–

Good morning, ladies and gentlemen. My presentation is going to be in 2 parts. Firstly, I will take you through the financial performance for the year ended 30th March, 2020. And secondly, how we intend to navigate through COVID-19, really being financially resilient in this difficult economic environment.

So firstly, I would like to take you through some of the items that have impacted our financial performance. If I start with the adoption of the accounting statement on leases, which is the IFRS 16 from April 2019, resulted in an increase in our EBITDA of ZAR 1.1 billion.

We then had to take a prudent approach with regards to COVID-19 and raised an additional impairment on trade receivables to take account of the impact of COVID-19. So we raised an additional provision of ZAR 626 million, of which ZAR 228 million was in BCX, and just over ZAR 300 million was in consumer, and this was over and above the normal provision for bad debts of about ZAR 514 million. Despite the expected economic challenges, however, the group has not yet seen a deterioration in our data book performance since the initial lockdown.

We also had to implement Phase 1 of the restructuring program, and thus, we recognized a provision of ZAR 1.2 billion in the financial year. The payments, however, relating to the restructuring were made in April 2020, which is the beginning of the new financial year 2021.

Just to take you through some of the salient features of our financial performance, as Sipho indicated, our mobile business continued to grow at more than 50%, growing from a much higher base but offsetting the decline that we saw in our fixed voice, which declined by 22%. We also saw that our mobile direct cost to revenue ratio improved from 52% in the previous financial year to 48%. There has been a significant improvement as well since the interims, where mobile direct cost to revenue ratio were at 53%, and they are now overall at 44% in the second half.

We are also pleased to report very strong improvement in our free cash flow from a negative of ZAR 1.3 billion in the first half of the year to now ZAR 2 billion and up more than 200% from the previous year. As a result, our cash balances have more than doubled from the last year.

We continued with our disciplined approach in how we allocate capital expenditure. We saw our CapEx to revenue ratio also improving to 18% from 22% in 2018 due to the contribution to revenue from our key growth areas. We’ve, therefore, been able to strengthen our balance sheet as well since the interims really supported by the strong cash generation. As a result, our net debt-to-EBITDA improved to 0.7x from 0.8x pre IFRS 16.

If you take into account the impact of IFRS 16, our net debt-to-EBITDA ratio improved to 1.3x from the market guided 1.5x, and an improvement from first half of the year where we were at 1.4x.

Taking you through the — a summary of our performance overall. We delivered resilient performance under very tough economic environment. We grew our operating revenue by 3%, largely driven by our mobile business as we indicated, with service revenue up 54%. However, we saw a decline in EBITDA of about 8.7% to ZAR 10.3 billion before the impact of IFRS 16, which was largely due to the significant decline in fixed voice, which has high margins, as we indicated.

Our headline earnings per share declined by 30%, in line with EBITDA decline, and partly also due to increased net finance charges and fair value movements, and I will unpack these later on.

Our capital expenditure is broadly in line with the previous year and has remained within the guidance of between 16% to 20%. The cash release initiatives that we started at the beginning of the second quarter delivered really great benefits, with free cash flow, as I indicated, improving threefold from ZAR 534 million in the previous year to now ZAR 2 billion, and I will unpack again this later.

The Board approved the final dividend for the year, in line with our current dividend policy of 60% of headline earnings, which is really a payout of ZAR 0.501 per share for the year. I think it’s important to indicate that these results are before taking into account the one-off exceptional items that I referred to in the previous slide as well as before taking into account the impact of IFRS 16 from a comparative basis. And I’ve given you the IFRS 16 on the first column to — just for complete this as well.

So if we move on to unpack our revenue streams further, we can see that our continued investments in key growth areas really underpin the growth that we are seeing in our new revenue streams. Mobile service revenue growing from ZAR 8.2 billion last year to ZAR 12.6 billion, underpinned by a 22% growth in capital investments in support of the $2.3 million subscriber growth ending the year at 12 million subscribers.

IT remained flat year-on-year, largely as a result of delayed spending from enterprise customers due to a weaker economy. This was evident in the decline in IT services of 2.5%, however, offset by the growth in IT hardware sales of 22% and the growth in application solutions of 3%. The decline of 22% in fixed voice revenue was mainly due to the decline in landline rentals or subscriptions of 21% and the decline in usage of 23% as we saw customers migrating to newer technologies.

We also saw good growth from Gyro’s Mast & Tower portfolio, with multi-tenancy revenue growing by 6.9%. Revenue from the fixed data products declined by 7.8%. Although our new data products grew by 14% to ZAR 2.4 billion, they are still of a lower base and not yet sufficient to offset the decline that we are seeing from these traditional data products.

The traditional data products, however, declined by 14% to about ZAR 7 billion as part of our strategy of accelerating the migration of customers to LTE and fiber. And we hope that with the launch of Pure Connect, which we launched in May this year, we hope that this will also help us to address the churn on our traditional data products.

If I can move on to unpack our cost line, we continued really with the focus on cost containment, really enabling us also to be able to minimize the impact that we saw on the fixed voice revenue decline on the EBITDA. We’re able, firstly, to contain the growth in operating expenses to below inflation at 2.5%. And this was really boosted by the benefits of the restructuring program that we implemented in 2019 financial year, partly also offset by the 6% salary increase that we implemented in the year 2020, which is the year under the review.

We also saw that the investments that we are making in modernizing our network enabled us to reduce maintenance costs in open sales. We saw assurance visits improving by 43%, and re-dispatch rates reducing by 42%. As a result, maintenance reduction in Openserve was roughly just over ZAR 200 million, and the balance of that being a reduction in maintenance, mainly in consumer for maintenance and support as a result of negotiation of data rates.

However, we saw an increase in other operating expenses, which is mainly related to the payments to third party service providers in both consumer and BCX in support of the growth that we saw in mobile as well as the BCX IT solutions growth.

In addition, there were some one-off costs that were incurred. Firstly, we saw an increase of just over ZAR 100 million for battery replacement due to power cuts as well as theft and breakages. We also had to account for a loss on the realization of the foreign currency translation reserve when we disposed off BCX Nigeria. The growth in service fees and operating leases that we are seeing is in line with the mobile sites that were installed. 746 mobile sites were integrated in the current year, and these are mainly utility costs on the sites as well as the leasing of land.

When we look at direct expenses, however, we can see that there has been an increase of 17.6% overall for the full year in support of the mobile growth, with the subscriber growth going ZAR 2.3 million, even though we have seen quite a significant improvement from mobile on those costs since we reported at interims.

Just to really unpack our direct expenses a bit further, payment to other operators increased by just over ZAR 700 million year-on-year, largely due to the increase in roaming costs, which is supported by the increase that we are seeing in data traffic growth of about 70%. Cost of handsets also increased by about ZAR 400 million. We added approximately twice the number of postpaid customers that we added in the financial year 2019, so we added about 690 postpaid customers in this current financial year.

Sales and acquisition costs also increased by just over ZAR 0.5 billion in support of the significant growth that we are seeing in mobile, mainly the increase on our dealer footprint in anticipation of the new roaming agreement as well.

I will just take you through the next slide, some of the benefits that we’ve seen from a mobile perspective with regards to cost reduction in the second half of the year. So this slide really shows how the focus in the second — in the second half of the year with regards to mobile direct cost has resulted in the data cost to revenue ratio, as I indicated earlier, really improving from 55% in the second half of the year — of last year to now 44.3%. And this was really achieved through a number of efforts, including reducing the cost to save, renegotiating contracts with dealers and also optimizing the network and beginning to roll out the DPS sites.

If I can move on to our reported headline earnings, we can see that reported headline earnings has been significantly impacted by exceptional items. Headline earnings after stripping out exceptional items, which are the impact of IFRS 16, the VSP cost as well as COVID-19 declined by 30%, largely as a result of the decline of 8.7% from EBITDA and also an increase in finance charges, in line with the increase in our borrowings for the year.

If I can move on to our capital expenditure. As you can see, our capital expenditure remains within guidance. In support of our key growth areas. Our CapEx to revenue ratio continues to decline from 19.9% in 2018 to now 18%, and this, as a result of the increase in revenue from the key growth areas that we mentioned earlier. We’ll continue to invest in services of the future, mainly being mobile, our fiber services, Fiber to the home, core network, which is the packet optical transport network as well as rolling out metro ethernet for enterprise customers. In addition to that, as Sipho indicated earlier, we did slow down our Fiber to the home passed so that we can accelerate the connectivity rate, and we saw that increasing to 48%, which was a 33% improvement from last year.

We are also able to reduce the unit cost to deploy Fiber to the home passed by 40%, really by just focusing a lot on capital productivity as well.

So metro ethernet, overall, for enterprise customers also increased by 26% year-on-year.

Just to touch on our free cash flow, as we can see, we’re seeing very, very strong improvement on our free cash flow, really underpinned by the working capital improvements that we made in the second half of the year, particularly. And I will unpack that as well later.

You can see that our repayment of liabilities, actually the repayment of liabilities of ZAR 1.1 billion relates to the adoption of IFRS 16, with ZAR 780 million of debt being for capital repayment and the balance really being for the interest portion. The increase in the finance charges of 19% is as a result of the increase in our net borrowing fruit for the year of about ZAR 1.8 billion.

The taxes that we paid increased by 40%, mainly due to a ZAR 300 million payment that we had to make to SARS in the fourth quarter of the year relating to the old FY 2012 Multi-Link’s tax dispute. The VSP payments that you see there relating to ZAR 475 million are mainly due to the balance of the payments that we made in BCX for the restructuring that took place in the previous financial year.

So essentially, as you can see, our operating free cash flow before capital expenditure really grew to ZAR 9.4 billion by 25%. CapEx broadly in line with the previous financial year. And then with the free cash flow then of about ZAR 1.7 billion before the adjustments for those VSPs. So if you take those adjustments, then our adjusted free cash flow is now at ZAR 2 billion.

If I can unpack our working capital improvement, which was really the reason for a significant improvement in our free cash flow, you can see that our strong — our improvement in working capital was ZAR 2.7 billion and really mainly due to an aggressive collection from our customers of just over ZAR 650 million — ZAR 667 million, and this is in line with the initiatives that we indicated in the second half of the year that we’ll be making to be able to improve our free cash flow position.

In line with best practice as well, we reviewed our standard supply payment terms in the current financial year as part of those cash release initiatives. We revised our payment terms to 90 days for most of our suppliers. And for those suppliers requiring immediate cash, we’re then able to establish a supply chain financing platform. So as a result, overall, our trade payables improved by ZAR 1.9 billion due to that supply chain financing program as well as agreed extended payment terms with suppliers. We’ll continue with these efforts as we weather the storm in the new financial year.

If we move on to our balance sheet, you can see that we’ve been able to improve our balance sheet, largely as a result of the strong free cash flow generation. Our cash balances more than doubled to ZAR 4.7 billion from 4.1 — ZAR 1.4 billion in the previous financial year.

In addition to improving our free cash flow, we also liquidated our short-term investments of ZAR 1.5 billion to be able to make the payments for their restructuring payments — for the restructuring program. And those payments were made in — at the beginning of the new financial year in April 2020. Although we increased our borrowings by ZAR 1.8 billion in the first half of the year, we were actually able to repay debt of about ZAR 1.2 billion in the second half due to our improvement in cash flows. As a result, as I indicated earlier, net debt-to-EBITDA ratio improved, and it is within guidance at now 1.3x post IFRS 16. If you exclude the impact of IFRS 16, we’re now at less than 1x at 0.7x relative to last year, where we ended at 0.8x.

Our average cost of debt also improved from 9.6% last year to now 8.4%. And this was mainly due to the following. Firstly, we replaced the short-term debt with long-term debt. We retained about ZAR 6 billion this year of debt and borrowed about ZAR 8.8 billion, really securing debt over a longer-term period. Our long-term turnoff from a debt profile perspective, and I will share with you later, is now over a period of about 9 to 10 years. We successfully refinanced the long-debt HTL ’20 as well at a much cheaper rate from about an average of about 15%. Finance charges also increased overall, largely due to the increased borrowing, as I indicated, as we continue with our capital expenditure program. ForEx and fair value movement increased largely due to the increase in cost of hedging. About 65% of our material for capital expenditure is sourced in foreign currency, and therefore, we hedged the risk associated with the volatility in the rent.

If we then move on to our outlook, I think what’s important to highlight here is that we are confident that in spite of the challenges that are posed by COVID, we are confident that we’ll be able to weather the storm. So due to the expected impact with the economy expected to decline even further, we are reviewing our previous forecast on top of — on top line as well as our margins. With only 2 months into the financial year, we believe it’s uncertain at this point what will be the extent of the impact of COVID, and we are not yet seeing the full impact on our business. However, we are taking all steps to make sure that we remain financially resilient under these circumstances and really focusing on 4 key areas: firstly, continuing with our sustainable cost management program; secondly, really continuing with our efforts in preserving as much cash as possible, so we’ll continue with our cash release initiatives; thirdly, looking at how we can mitigate the refinancing risk due to the volatility with regards to the financial market; and then fourthly, continuing with our disciplined capital allocation framework.

And if I can unpack this further, if I can start with the focus areas on sustainable cost management as well as cash preservation. We’ll continue to drive cost down. Our focus really being to maintain a really, really tight control on cost and escalation. We have a number of initiatives that are already underway. Firstly, the reduction of our fixed costs, which is really the restructuring program, and we expect to realize a benefit of ZAR 1 billion from Phase 1 of the restructuring program as part of reducing the fixed costs associated with the fixed voice business that is declining.

Secondly, we will commence with Phase 2 of the restructuring, as Sipho has alluded, in the second half of the year. Our initiative to reduce direct expenses in mobile, as you saw, have delivered great results, and this will continue in this financial year, really focusing on optimizing the network and continuing with the rollout of DPS sites to get more efficiencies and to be a lot more effective. We are also reviewing contracts with third parties and suppliers to be able to renegotiate better rates. We’re also looking at other areas OpEx initiatives to make sure that we can contain our operational expenditure below inflation.

So overall, we are targeting an estimated between — an estimate between ZAR 1 billion to ZAR 2 billion of cost savings in this financial year.

Secondly, if we move on to cash, cash preservation is very key, particularly in these times of COVID-19. It’s important for us that we continue to protect our liquidity as well. So our relentless focus on cash preservation, as I said, delivered great results in the first half of the year, and we are going to be continuing with those results — with those initiatives to be able to generate positive free cash flow. We are again targeting between ZAR 700 million to ZAR 1 billion of cash release initiatives as a target, and we want to maintain, at least as a minimum, more than ZAR 1 billion of cash in the bank.

The targeted positive free cash flow will, obviously, exclude the VSP payments that we are making. Firstly, the payments that we’ve made in April already, but also the payments relating to the Phase 2 of the restructuring, any spectrum acquisition costs as we want to participate in the spectrum auction that is forthcoming, payments that we need to make to SARS for the tax dispute that I mentioned earlier on.

So if we move on to how we then mitigate their refinancing risk, we have replaced our short-term debt with long-term debt, as I indicated, therefore, the Manhattan that we had previously, if you look at the debt maturity profile, in 2019, you can see that we had over ZAR 5 billion of retentions. We’ve been able to flatten that profile over a longer-term period.

Annual retentions will probably remain at around ZAR 2 billion or less to manage the refinancing profile and, thus, reducing the refinancing risk. The FY 2020 and FY 2023, as you can see, the redemptions relating to those years remain comfortably below ZAR 1.5 billion, and we’ll try and avoid any issuance of funding that matures in those years.

So given the long-term nature of our CapEx program, we will extend the duration of our debt in line with the CapEx profile to avoid any near-term financing risk going forward.

We’ve also increased the floating rate debt in line with the current interest rate cycle. So the composition of our debt portfolio has now shifted from about 69% fixed in 2019, as you can see, to now 48%, and we continue to review the mix as the opportunity presents itself. We’ve also adjusted the short-term debt versus long-term, with long-term debt now making up about 84% in 2020 from about 47% in 2019. And this will enable us to be able to manage the cost of funding and the redemptions in line with our CapEx profile.

We also have sufficient headroom in our balance sheet to be able to raise any additional funding under these uncertain circumstances that may be required going forward. So if we assume a net debt of about 2x, we have a net debt headroom of about ZAR 7.2 billion, while being able to maintain a 2x net debt-to-EBITDA ratio.

Rating agencies guideline currently have us at between 2.5 and — between 2 and 2.5x. We have adequate facilities as well available to be able to assist us in protecting our liquidity. We’ve also secured some longer-term funding. For instance, we now have vendor financing, or ECA funding for the mobile CapEx program, which has a 2-year capital repayment holiday, and it’s actually a 10-year tenor. So that has really assisted us to be able to just look at how do we make sure that we maneuver and really protect our liquidity due to COVID impact.

We’ll continue our renewed focus as well and disciplined approach in how we allocate our capital. With all the efforts that we are making, which I mentioned earlier, we aim to derive maximum operational as well as capital productivity to generate a lot of cash during this period. Firstly, we will allocate the funds that we have towards maintenance and regulatory compliance so really retaining or maintaining the integrity of our current asset base. We’ll also continue to assess our balance sheet strength before any CapEx investment for growth, really with the objective of making sure that we maintain a healthy and flexible balance sheet.

We’ll continue to focus on key growth areas, as we indicated, where we are seeing good growth. That are in line with our investment strategy. However, given the current volatile environment that we are operating in, we will be flexible with regards to our investments in order to protect the liquidity of the group. So should revenues decline we’ll equally reduce the CapEx investments in order to protect our liquidity position. We believe that maintaining a strong balance sheet and protecting our liquidity position is of utmost importance during these critical times. We’ve, therefore, decided to suspend our dividend policy for the next 3 years, starting from the financial year 2021. We considered a number of factors in arriving at this decision. Firstly, we want to participate in the forthcoming spectrum auction. Secondly, we want to continue with our investment program for future growth. We’ve also made the payment for the first — the Phase 1 of the restructuring program, as I indicated, in April, which is the beginning of the financial year. We will also be funding Phase 2 of the restructuring program, which we intend to implement in the second half of the new financial year. But more importantly, as I indicated, protecting our liquidity during these uncertain times of COVID is very important. However, as we embark on the value unlock, which Sipho is going to unpack further later, we’ll consider some sort of a special dividend should we have surplus cash.

If I just move on to the last slide, just looking at how we have (inaudible) against guidance, if you recall, we had a medium-term guidance of 3 years, which started on 2019 with, 2018 financial year being the base year. So FY 2020 was our second year of the guidance. We performed well in line with the medium-term guidance over the 2 years, except for EBITDA as a result of the significant decline that we’ve seen in our fixed voice business, which has higher margins as we saw the technology shift from legacy to next-generation technologies.

So the lockdown response to the COVID-19 pandemic is expected to impact the South African economy significantly, but quite quantifying this likely magnitude is challenging at this point in time. So against this backdrop of both an exceptionally weak economy and heightened uncertainty, it is really difficult for us to be able to maintain the current medium-term guidance that we have. Therefore, we have found it prudent to be able to withdraw the medium-term guidance until such time that we are able to quantify the impact of COVID-19 on our business. However, during this time of uncertainty, we’ll make sure that we really focus and drive our business, really focusing on sustainable cost management, really driving cash to protect the liquidity of the business as well as the profitability of the business. So the full benefits of the restructuring program — the 2-phase restructuring program are expect it to flow over the next 2 years. Thank you, ladies and gentlemen. I will now hand over to Sipho to conclude.

——————————————————————————–

Sipho Nkosinathi Maseko, Telkom SA SOC Limited – Group CEO & Executive Director [3]

——————————————————————————–

Tsholo. Thank you very much, Tsholo. Thank you very much. So we’ll try now to kind of wrap it up. So a couple of just key things I wanted to flag. The first one, in the next couple of days, we are relaunching our small and medium business through a digital platform ecosystem. Our view is that small and medium entities will be the cornerstone of revitalizing the South African economy. At the moment, one of the things that we are doing is that we are providing the portal that currently is being used by Government to register all of the small and medium businesses, so that is essentially provided by ourselves. And we are looking to really scale our digital system through the platform ecosystem, both in terms of how we’re looking at financial solutions, e-commerce platforms, and the lockdown actually has indicated and has made us see quite a bit of traction in this area. And a couple of media announcements will be made over the next couple of days. We will be relaunching our Yellow Pages platform to what we call Yelp, and it builds on the current yellow Pages digital platform, the Internet Yellow Pages and the app. It will transform them into an online marketplace for small businesses and help them scale, grow and transact with customers, evolving as well the current online platform into an e-commerce platform that enables SMEs to purchase solutions tailor-made to them, manage their profiles, their accounts, upgrade their services in a seamless experience offered on a digital platform. And Lunga and his team have put an enormous amount of work, and I think in the next couple of days, there will be a massive launch that sees us now beginning to occupy that space especially during this time to enable small and medium enterprises to breathe and actually become the engine for the revitalization of the economy.

So as we think forward, one of the key themes that will be central in terms of our strategy execution is what one calls value unlock. And maybe a bit of an update in terms of our operating model journey. So if you recall, actually, we’ve been at this now for the last sort of 7 years or so. The first chapter around our business transformation process was to manage our costs, and we’ve done reasonably well in managing our cost and headcount. Just in terms of numbers, if one were to just give you a sense, I think, in 2013, there was about 22,900 employees. If you add BCX, in essence, if we had acquired it at that time, it would have made us to be roughly about 30,000.

I think as we speak today, we’re probably under 12,000 employees already. So we’ve made quite a lot of progress. And this is before we actually get to the second phase of the process that we started last year. So that focal point continues in terms of getting to a point where we absolutely need to get to a sub-10,000 number from a group perspective to make sure that we are able to deal with the extent of the fixed cost and variabilize it. That was number one. The second one was to make sure that our mobile business becomes more and more sustainable. Back in 2013, I think our EBITDA loss was just about ZAR 2.2 billion, and you saw how the business now is beginning to do. The margins are getting better. In fact, the trends are holding even in the new financial year. The growth rates that we saw in the last financial year, we continue to see them hold. And the team is absolutely focused. So stabilizing the mobile business and really setting it up for the new wave around data.

Thirdly, make sure that we have stand-alone business units or divisions or subsidiaries that can be able to compete with their peer group. And we achieved a couple of things. Firstly, we managed to make sure that BCX is structurally separated from Telkom, and Gyro is also structurally separated from Telkom. So that begins to give us the flexibility in terms of how we start to think about those businesses.

Functionally separated, we obviously have on the Openserve side, that business is functionally separated, and we are looking to conclude the journey around structural separation. And then the remainder of the retail business as well be structurally separated, and that will give us maximum flexibility. And our view, therefore, is that the objectives of the separation journey, which commenced in 2013, ’14, are largely achieved. We now have a short hop to get to structurally separating Openserve and the balance of the retail business.

As I indicated earlier on, some of the businesses are functionally separated with the objective of getting them to structural separation and then others already are structurally separated, which gives us maximum flexibility. We are in the process of completing the balance sheet split across, in particular, Openserve and consumer. And once we’ve done that, it is then to complete the structural separation of Openserve and also prepare it and the rest of the businesses for a value unlock opportunity and complete the operating model.

So what is the value unlock rationale? I mean, it’s made up of 3 things. Firstly, there’s a valuation gap, which is there. Because when we look at the totality of our business, and we look at one structurally separated with their peer groups, what sort of valuations should they be fetching? We clearly can see the valuation gap that is there. We don’t think that the market cap as it is, is a true reflection of the intrinsic value of the company. And I will illustrate that valuation gap in the next slide.

Secondly, there has been strategic imperatives for us, such as scale and capabilities that had hindered growth in some of the business units. And we think that now we are about to emerge with mobile beginning to achieve the appropriate scale in terms of data. Our Gyro business being functionally separated our Openserve business being functionally separated and so is our consumer business. And therefore, the strategic imperative to strengthen our competitive position for each of these businesses will remain: scale, capability and growth.

So when you look at all of these businesses, and as I indicated in the earlier slide, the market cap is not, as management, we believe, a true reflection of the intrinsic value of these companies. So there’s a massive valuation gap. If you look at our EV EBITDA multiple of full year ’20 with an underlying EBITDA based on the sum of the parts, we believe that there’s a valuation gap of at least around ZAR 40 billion. And we’ll certainly be exploring ways of how to unlock this trend value in this sort of semi conglomerate structure. And over time, we will be making the right announcements. If you look at Gyro, in essence, Gyro will have — should be, if you look at a peer group of Tower Cos, they’re trading roughly at an EV EBITDA multiple of about 9% to 11%. And yet, that specific is not demonstrable, and therefore, and I’ll talk a little bit about Gyro later on.

If you look at Openserve, equally if you look at fiber infrastructure companies and what their valuations are, clearly, that is not reflected in the valuation of the overall group. So for us, therefore, the some of the parts actually indicates, as I mentioned earlier on, the valuation gap that is not reflective of the intrinsic value. And as part of pursuing the execution of our strategy in this operating model of separating the entities and making sure that on a stand-alone basis they can thrive, that becomes one of the ways in which we looked at unlocking at that traded value.

One of the businesses that gives us an opportunity to unlock value is Mast & Tower. And our Mast & Tower portfolio performance has been very, very solid. I indicated earlier on just what sits in the total portfolio, what are the productive assets, what are the assets that are not productive, which ones are mature and the extent of the opportunity for growth? Last year, Mast & Tower revenue grew by almost 50% to about ZAR 1.2 billion, and supported by a growth of about 7% in the number of external multi tenants that they have. And this revenue growth has also been augmented by the demand for sites by Telkom Mobile as well as leases from other external tenants, whether in the Mobile space or in the media space.

The EBITDA growth has been about 120%, benefiting both from how they’re growing their revenue, but also, at the same time, managing their costs.

So if you look at this slide, it actually indicates the extent of the tenant profile in the Mast & Tower. They have at least more than 100 different tenants, with Telkom representing roughly about 42% of the total tenants, third-party mobile network operators representing about 35%, and other non-mobile network operators representing about 17%. And there’s quite a number of initiatives to increase tenants in 2020. They’ve gone live in Gyro with their first small-cell site with a full-service offering to mobile network operators. So they’ll begin to grow that. They’ve started to roll out what you would call in-building solutions to enhance mobile network coverage in commercial buildings, and I think, earlier on, I indicated what their plans are in terms of adding new sites onto their portfolio of sites by about 2,000-or-so by 2023.

And we’ve also been looking at different precedents in terms of tower transactions, the extent of how those entities were valued, what the thesis was, what was the valuations, what was the value unlock, and we continue to inform ourselves with that precedent in the international market, which begins to provide just a flavor of how we may want to look at some of these options going forward. And in our view, what is the investment case for Mast & Tower? It’s a very unique business model. Tower Cos have, in our view, a proven and scalable business model, which is largely underpinned by very, very robust telco growth.

High-quality assets. I’ve taken you through just the extent of the quality assets, both in terms of height and structure. Thirdly, we’re looking at how do we further grow organically the opportunities over time, but also other inorganic growth opportunities as well. And a very, very potentially robust shareholder in the form of Telkom that will look to work with other potential partners as we are looking to do this. And I think this begins to inform as a theme as these businesses become more and more separated with their own business plans and their own roadmaps to growth, how we begin to look at that specific opportunity to unlock value. And over time, as appropriate, we’ll be making announcements in a way in which there can be clarity on what our value unlock approach will be.

So I’ll sort of take a pause there. I think there’s a way in which we’ll take questions. I think there will be questions, firstly on the line that Tsholo and I will address. And then after that, there are other questions from the webinar that will also be given to us. I’m not sure whether — do I continue

——————————————————————————–

Deon Fredericks, [4]

——————————————————————————–

You can sit.

——————————————————————————–

Sipho Nkosinathi Maseko, Telkom SA SOC Limited – Group CEO & Executive Director [5]

——————————————————————————–

I can sit. Okay. Thank you.

================================================================================

Questions and Answers

——————————————————————————–

Deon Fredericks, [1]

——————————————————————————–

Thank you very much. While we wait for members on the line to queue up, if there’s any questions, Babalwa, that you can take us through in the meantime?

——————————————————————————–

Babalwa George, [2]

——————————————————————————–

Okay. So I have a question from Jonathan Kennedy-Good from Standard Bank. The question, Rick, as follows. Please can you provide us with some color on the significant improvement on the mobile business? One. How has the revenue growth evolved post year end? And two, are you expecting continued margin improvement in the year-end?

——————————————————————————–

Sipho Nkosinathi Maseko, Telkom SA SOC Limited – Group CEO & Executive Director [3]

——————————————————————————–

Yes. So the CEO of the mobile business is on the line. It’s a pity he could not be with us here. So if Serame can be able to answer that question, I think that will be helpful around mobile. But if they can’t get him on, I’ll give it a bash.

So, do you mind to repeat the question for Serame to get it again?

——————————————————————————–

Babalwa George, [4]

——————————————————————————–

Please, can you provide us with some color on the significant improvement on the mobile business? One. How has revenue growth evolved post year end? Two, are you expecting continued margin improvement in the year ahead?

——————————————————————————–

Sipho Nkosinathi Maseko, Telkom SA SOC Limited – Group CEO & Executive Director [5]

——————————————————————————–

Yes. I mean, if he’s not able to answer, I’ll take it. I’ll take that question. Yes, we continue to see the growth holding the post year-end in the mobile business. In fact, actually, in the wireless business, we’ve seen significant demand as well with the transition to working from home and learning from home. So we’ve seen that holding. Are we hope — are we continuing to see margin improvement? Certainly. We continue to work on how do we acquire more and more profitable customers, number one; but secondly, continue to optimize the cost base. And I think COVID as well gives us an opportunity to rethink a lot of things. The role of digital will become even more and more pressing. Do we need to have as many stores as we have? How do we make sure that we have a lot less infrastructure to support the mobile business in terms of stores and call centers, and we can be able to leverage on digital channels. So those 2 questions that would be a sort of detailed answer. We continue to see the trends holding, and we certainly are working on the expansion and the enhancement of the margin improvement, both in terms of cost efficiency and how we target the enterprise market, especially in terms of mobile broadband solutions because that is what is required.

——————————————————————————–

Babalwa George, [6]

——————————————————————————–

A second question from Jonathan. Will Telkom be able to pay for new spectrum from existing cash? Or should we expect that Telkom may have to raise equity to pay for spectrum?

——————————————————————————–

Tsholofelo B. L. Molefe, Telkom SA SOC Limited – Group CFO & Executive Director [7]

——————————————————————————–

I’ll take the question. So obviously, we still don’t know what the extent of the cost for spectrum is going to be. But based on the estimates that we’ve made, we are comfortable that we will be able to pay it through a combination and cash and some funding. So we are looking at alternative funding solutions that will assist us in that way. So it will be a combination of cash and debt.

——————————————————————————–

Sipho Nkosinathi Maseko, Telkom SA SOC Limited – Group CEO & Executive Director [8]

——————————————————————————–

Okay.

——————————————————————————–

Babalwa George, [9]

——————————————————————————–

Okay. Another question. How has the performance on fixed lines, line rental and usage being post year end?

——————————————————————————–

Sipho Nkosinathi Maseko, Telkom SA SOC Limited – Group CEO & Executive Director [10]

——————————————————————————–

Yes. So we launched a new product called Pure Connect through Openserve. And we’ve started to see, especially on the copper side, a stabilization. And to some extent, actually a very, very aggressive marketing of copper services by various ISPs. The prices have been brought down quite tremendously as people are looking for solutions, especially to be able to work or to learn from home. It becomes quite indisputable that a fixed line connection is better than a mobile connection, so to speak. In fact, some customers who had initially asked to be disconnected from the network are now beginning to change their minds and say, « no, no, no », they actually need the service. So we’ve seen that, and we continue to watch it. And as you would have seen as well, we introduced what is essentially called Naked DSL. And we’ve opened that up to the market as broadly as possible. There is sufficient capacity in the network. The investment has been amortized over a long period. So therefore, the ability to get at the lower end of the price point with that service becomes very, very important. And we’ll see how it goes, but we remain confident that Pure Connect, as part of Naked DSL, will be a competitive product in the array of products that you currently have.

——————————————————————————–

Babalwa George, [11]

——————————————————————————–

There’s a current question from John Kim from UBS. How far along is Telkom with the build-out of fiber? When could we expect a meaningful reduction in group CapEx spend?

——————————————————————————–

Sipho Nkosinathi Maseko, Telkom SA SOC Limited – Group CEO & Executive Director [12]

——————————————————————————–

Yes. So what we had — and we’ll take it as a double act. What we had indicated a couple of years ago was that the big lump around CapEx would have been the packet optical transport network. So that probably has another 2 years to go, and it begins to really significantly taper off. So that’s on the backhaul and on the core network. You’ll obviously be left with how you invest in Fiber to the base station, Fiber to the Business and fiber to the home. As you may well have seen, we’re focusing a lot more on getting higher rates of homes connection relative to homes passed so that we can remunerate the capital. And even there, we use essentially 2 components in our armor. We use LTE, which enables us to acquire customers. And once we’ve been able to acquire customers, as traffic increases on the wireless side of home broadband, instead of continuing to densify the network, that’s where we then offload to fiber to the home or Fiber to the Business, which enables us, therefore, to manage the CapEx evolution over time in a sensible way.

Tsholo?

——————————————————————————–

Tsholofelo B. L. Molefe, Telkom SA SOC Limited – Group CFO & Executive Director [13]

——————————————————————————–

So? Yes. So — and I think Sipho has touched on a lot of it. I think from a fiber to the home passed, we’re obviously more than 90%. If you look at what initially set out to do in terms of fiber to the homes passed. But I think as we indicated earlier, we’re obviously seeing an opportunity post COVID-19 in terms of fixed. So we will, obviously, be looking at that going forward. And I think the fact that we’ve been able to be a lot more productive from a capital perspective will also enable us to do a lot more with less, but the forecast will be on connectivity as Sipho indicated.

——————————————————————————–

Deon Fredericks, [14]

——————————————————————————–

We’ll take a small break from the webcast questions. Are there any questions on the conference call?

——————————————————————————–

Operator [15]

——————————————————————————–

There are no questions at this stage. (Operator Instructions).

——————————————————————————–

Deon Fredericks, [16]

——————————————————————————–

Babalwa, I hand back to you.

——————————————————————————–

Babalwa George, [17]

——————————————————————————–

Okay. So what is your view on independent tower core demand for acquiring towers from MNOS? And do you believe, over time, we will see more MNO-owned towers being bought and operated by independent tower companies?

——————————————————————————–

Sipho Nkosinathi Maseko, Telkom SA SOC Limited – Group CEO & Executive Director [18]

——————————————————————————–

Yes. I mean, we think it’s inevitable. We think it will happen over time. It no longer will matter, it no longer will provide you with a strategic advantage to own the towers yourselves — yourself, if you’re an MNO. You’d want to release that capital that is tied there so that you can reinvest it in the areas where you can win and actually attract a shareholder universe that is — has the appetite for that kind of investment going forward. It’s inevitable that efficiency is one of their things that we will look for in this sector. Our view actually is that the sector, especially those that are operating at the higher range of the margins, those margins will come under pressure over the next 5, 10 years. That’s absolutely inevitable. And the ones that are most efficient are the ones that actually will be able — you’ll generate your margins not by the price you fetch from the end customer, but how efficient you are and be able to make available compelling product propositions. And that’s what we think. So it’s almost an inevitability over time.

——————————————————————————–

Deon Fredericks, [19]

——————————————————————————–

Due to time constraints, you’ve only got the chance for one more question. We just wanted to check if there is a question that’s come through on the conference call in the meantime.

——————————————————————————–

Operator [20]

——————————————————————————–

And there are no questions from the line.

——————————————————————————–

Babalwa George, [21]

——————————————————————————–

The last question then. Can you please update us on the Phase 2 of the headcount reduction?

——————————————————————————–

Sipho Nkosinathi Maseko, Telkom SA SOC Limited – Group CEO & Executive Director [22]

——————————————————————————–

Yes. I mean, it’s a very broad question as it were. So we have — we had always indicated that this will be done in phases. So Phase 1 was done last year. Phase 2 will be done this financial year. Focus on Phase 2 will be broadly in BCX and also in the corporate center. But we also have not discouraged the rest of the business to continually look for areas of further efficiency because with COVID-19, we’ve been plunged into an unpredictable world. And therefore, we’ll have to look for efficiencies there. This will be done largely in the second half of the year, as we had indicated. We obviously need to make sure that all the key stakeholders get engaged in the form that they should be engaged. And we can reach the outcomes that we have set for ourselves. But remember, all of this is part of the journey that we have set for ourselves. We remain committed to that, continue to simplify the business, make the business more efficient, take a lot more cost as you possibly can, hit our optimal target in terms of efficiency, fire up the cylinders of new revenue businesses in the form of IT solutions and data, manage your cash as best as you can, all of the cost savings, reinvest in those revenue streams that will give you longevity And that is fiber, it’s towers, it’s monetizing the spectrum, it’s our data center infrastructure. And organize yourself in a way that gives you the flexibility to be able to unlock value in the business. And all of that, it’s something that we remain absolutely committed to deliver on.

——————————————————————————–

Deon Fredericks, [23]

——————————————————————————–

With no further questions, are there any closing remarks Mr. Maseko?

——————————————————————————–

Sipho Nkosinathi Maseko, Telkom SA SOC Limited – Group CEO & Executive Director [24]

——————————————————————————–

No, no. So thank you very much for spending a bit of time with us. Obviously, this was a very, very difficult year. And we’re entering into the 2020s in a very, very uncertain world. But one thing for sure, in our view, is that the world post COVID-19 will not be the same as before. We think that actually some of the decisions we have taken around network, around infrastructure and organizing ourselves has given us the flexibility that we need. We are very, very clear with the programs that Tsholo is leading in terms of managing cash and managing costs. We are absolutely prepared for the COVID-19 pandemic and build sufficient resilience. We’ve taken actually a worse view that this thing will go on for the next 24 months, and how do we make sure that this company survives and thrives during that period. And all of our plans internally, even as we speak, we only have — we have at least 94% of our people working from home. As a company, we remain at Level 5 probably around till the end of August, September. That also has thrown out quite a lot of things for us that we’ve seen, just what happens to productivity, what happens to efficiency, what happens to the things that we can change and how can we set ourselves for a new opportunity. We have a team committed to the strategy, as we’ve defined it. The Board that works well with us as well, actually, and we continue to be very, very active and responsible citizens and play a very positive role. Obviously, there’s a few things that we are watching in the fear moment in terms of what might happen. Spectrum release, how it’s released and whether it’s released consistent with the findings of the competition commission to enhance competition? It’s something that is absolutely going to be super important for us, to make sure that the market does not remain a duopoly that it has been for the last 25 years. And therefore, there needs to be a breakout in terms of the duopoly further enhance competition, improve quality and bring prices. And we don’t think that the market structure that we’ve had in the past is what will deliver that. And we’re absolutely prepared for the next chapter in the evolution of the company. So thank you very much, and we’re done.