Airtel Africa Plc

Good afternoon, ladies and gentlemen, and welcome to the Airtel Africa 9-month 2026 results. All participants will be in a listen-only mode. There will be an opportunity to ask questions later during the conference. If you should need assistance during the call, please signal an operator by pressing star, then zero. Please note that this event is being recorded. I would now like to hand the conference over to Sunil Talda. Please go ahead, sir.

Thank you very much. A very good morning. Good evening to all of you and thank you for joining on today's call. I'm joined on the line by Kamal Dua, our CFO and Alistair Jones, our head of investor relations. We will shortly be answering your questions, but first I would like to provide you with a brief overview of the recent performance at Airtel Africa. I think these results speak for themselves. We have continued to produce a strong operating and financial performance. with reported currency revenue growth of 28.3% and almost 36% growth in EBITDA over the last year. Constant currency revenues and EBITDA, a reflection of the underlying performance saw encouraging growth of 24.6% and 31% respectively. The outstanding feature of this performance in my view is the continuing scale of opportunity across the business. We operate across African continent with a combined population in excess of 650 million people where the penetration of both telecom and financial services remains low. We have a broad portfolio of services that are in high demand spanning data, home broadband, enterprise solutions, mobile money and merchant payments to name a few. As digital adoption and financial inclusion continues to rise, This positions us to sustain strong growth rates over the coming years. Our refined strategy is working to capture this opportunity as we attract customers and build loyalty in order to sustain this industry leading growth. These results underscore the substantial work we have been undertaking over the last few years to embed this customer centric strategy across the group. The result has been increased adoption of our digital services, which allows customers to access them with ease alongside the launch of transformative offerings, such as the AI spam alert, which protects our customers from fraud and the recent partnership with Starlink, which will enhance connectivity to our customers across the footprint. These are strong examples of innovation and innovative initiatives that differentiate us from competition and solidifies our position of being able to capture the significant opportunities across our markets. To deliver an outstanding customer experience, we have accelerated investment to increase capacity and coverage across our footprint. We have increased our sites by approximately 2,500 and expanded our fiber network to over 81,500 kilometers as we focus on enhanced coverage and data capacity to further improve the customer experience. this investment remains the cornerstone of our ambition to capture a larger share of the opportunity on offer across the continent and is reflected in the strong operating and financial results we have reported this morning in summary our primary focus remains delivering an exceptional customer experience essential for creating value for all our stakeholders our revenues reach 1.3 Let me now briefly run through the financial performance in Cord 3 specifically. Our revenues reached $1.69 billion, which was 24.7% growth in constant currency and acceleration from 24.2% in the previous quarter. Given the recent foreign exchange developments, this translated into a growth of almost 33% in reported currency. On a regional basis, a key highlight was the performance in Francophone Africa, which saw its constant currency growth accelerate from 15.8% in Q2 to 18.7% in Q3, as our investments and strategic focus have helped drive a strong recovery over the last few years. In Nigeria, strong demand and tariff adjustments contributed to a further acceleration in growth to 53% in constant currency. While in East Africa, constant currency growth of 16.1% remains robust despite evolving market dynamics over the quarter. Moving on to our two primary business segments, our mobile services business continued to see strong trends with operating momentum in customer growth. Usage and output driving revenues 23.6% higher in constant currency. Customers of 179.4 million grew by double digits with data customers rising almost 15% to 81.8 million. Smartphone penetration increased almost 4 percentage points reaching to 48.1%, but this also reflects the scale of the potential for the smartphone opportunity and take up in our footprint. Data traffic increased by almost 47% as data usage per customer reached 9.3 GB per month in quarter three, up 25.6% from the previous year, and an 8% increase from quarter 2 levels. It is clear that underlying fundamentals combined with a strong execution are enabling the sustained level of demand. In addition, data R2 remains supported by these operational trends with a 16.2% increase in quarter 3 leading to a data revenue growth of 35.5% in constant currency terms. With data revenues now being the biggest component of revenues, the performance in this segment is key to sustaining a strong overall group revenue performance. Now on to another very significant growth engine for us, the mobile money business. Able money crossed two thresholds in the last quarter. Firstly, it exceeded the 50 million customer mark with 52 million customers at the end of quarter three. The second milestone was seen the annualized total process value or TDV exceed 200 billion dollars reaching over 210 billion dollars a growth of 36 percent both these achievements reflect not only the significant market opportunity but also the structural competitive advantage and scalable platform which has driven increased customer engagement as ecosystem continues to expand with only 52 of our almost 180 million gsm customers to sustain this strong customer growth momentum remains intact. This combined with continued uptake of new services and increased engagement on the platform highlights a very compelling growth narrative. In the quarter revenue growth of 28% in constant currency and EBITDA margins of over 50% differed decent class financials where growth, profitability and strong cash conversion enables the continued scaling of this very attractive business. group with EBITDA margin continue to expand to 49.6% in quarter three up from 49% in quarter two as cost efficiencies, a more stable macro backdrop and operating leverage continues to benefit. Notable mentions are Nigeria where margins increased to 57.8% and a further increase in francophone margins to 44.3% on the back of strong operating results. At a group level, this has driven a very pleasing 31% increase in constant currency EBITDA, which when combined with currency tailwinds has resulted in a 40.8% increase in reported currency EBITDA. Within finance costs, aside from the most stable FX environment, the group's effective interest rate has declined by 200 basis points. We have seen the interest rate cycle turning more supportive with policy rates moving lower and the increase free cash flow generation enabling us to pay off higher rate debt. Leverage remains very comfortable with least adjusted leverage declining to 0.7 times down from 1.1x in the prior year. Adjusting the extraordinary items in the previous year and all foreign effects gains or losses we have seen the underlying EPS increase from 7.4 cents in the prior period to 11.6 cents in the current nine month period an increase of 57 percent basic EPS has increased to 13.1 cents from 4.4 cents in the prior year underpinning this performance has been our capex investments as we communicated at the h1 results We've announced CapEx diamonds of between $875 million to $900 million for this financial year. This is a significant step up from previous year, reflecting continued confidence in the outlook for the growth and scale of the opportunities available for us to capture. In this nine-month period, CapEx increased over 30% to $603 million, and we are on track to deliver according to our guidance. As I highlighted earlier, the prospects for multi-year growth remains very apparent, and this accelerated investments will provide the platform necessary to capture a higher share of this growth, while also enabling us to unlock additional growth opportunities in areas such as data centers, but also the home broadband space where we see strong momentum. Before I hand it over, you know, the Q&A, just summarize a few key points. Firstly, there were strong results with constant currency revenue and EBITDA growing by almost 25% and 31% respectively in Q3, translating to a 33% and 41% reported currency revenue and EBITDA growth. Operating momentum remains intact with strong customer base growth and usage growth across our telecom business. Aided money continues to scale with strong results, reflecting the truly unique business opportunity. And we are seeing strong progress in the preparations for the IPO, which remains on track for the first half of 2026. We have accelerated our investments to capture the significant growth opportunity that is available to us and we believe this will put us in much stronger position to showcase our ability to capture the structural growth potential. We are excited by the future and we see a unique opportunity to sustain strong levels of growth going forward through a razor-like focus on strategy of putting the customer at the heart and center of everything we do. We look forward to reporting our successes in the future and continuing to generate value for our shareholders. And with that, I would now like to open the line for questions for which I'm joined by Kamal. Operator, I now hand over to you to facilitate the Q&A.

Thank you, Sal. Ladies and gentlemen, if you would like to ask a question, please press star and then 1 on your phone now. You will hear a confirmation tone that you have joined the queue. If you decide to withdraw the question, please press star and then 2 to remove yourself from the list. Again, if you would like to ask a question, please press star and then 1 now. The first question that we have today is from Rohit Modi of Citi. Please go ahead.