Blue Label Telecoms Integrated Annual Report 2018

Our strategy and the Six Capitals R I T E R E A C H E F F I C I E N C Y I N N O V A T I O N T R U S T REACH INNOVATION TRUST EFFICIENCY OUTCOMES FINANCIAL • Expansion of hub and spoke strategy in core Blue Label business financed through cash generated from operations • Greater geographic reach and new product acquisition through Airvantage – Africa and Brazil, 3G Mobile and acquisition of Cell C – direct access to mobile network. R62 million capex devoted to investing in technology and point of sale devices. The ability to reconcile over one billion physical cash and virtual payments a month builds trust with suppliers, merchant and customers. Blue Label’s commissions earned are low, hence our reliance on volume to drive earnings growth. FY18’s acquisitions and share issues have muted growth this financial year due to interest forfeiture and lower bulk settlement discounts but position us well for growth into the future. • Gross profit increased 7% to R2.28 billion. • EBITDA increased 4% to R1.34 billion. • Core HEPS increased 4% to 120.61 cents. • R7.6 billion on acquisitions of which R3.9 billion was raised through equity placements. The pool of capital available to Blue Label, including debt, equity and cash generated from operations and investments. Our RITE strategy defines the key focus areas for the business. The strategy’s thrusts are Reach, Innovation, Trust and Efficiency; all of which we are building on to deliver sustainable returns to all our stakeholders. The key focus areas are being bedded down throughout our organisation and are expected to support revenue growth, EBITDA growth and cash flow generation. In allocating our capital among the various value drivers, we need to consider the trade-offs between the six capitals which describe the resources available to us. Decisions are made through seeking to maximise positive outcomes and mitigate negative impacts. 06 Blue Label integrated annual report 2018