Blue Label Telecoms Integrated Annual Report 2019

32 Blue Label integrated annual report 2019 Joint CEO’s report continued Essentially, agile platforms accelerate the delivery through our RITE (Reach, Innovation, Trust, Efficiency) strategy of new products and services and enable the Group to launch new revenue streams on our enhanced technology platforms. FINANCIAL PERFORMANCE Impairments, fair value downward adjustments and the Group’s share of losses in Cell C negatively impacted our earnings by R7.5 billion. We accept responsibility for this poor performance and are determined to regain trust with our respective stakeholders. Our focus on the operating efficiency, speed to market and customer service within the core Blue Label business has resulted in a good performance relative to the South African economy. We intend to continue to build on this strength in coming years. Please refer to our detailed commentary in the financial director’s report on page 33 and to our financial results presentation which details our strong product and channel performance, growth in the informal market, further gains in prepaid electricity and data business. CELL C TRANSACTIONS On 7 August 2019, Blue Label notified shareholders that Cell C and MTN South Africa had concluded a detailed term sheet regarding an extended national roaming agreement. This transaction will result in substantial cost savings for Cell C by reducing network and capex spend. This agreement is mutually beneficial to both parties as MTN will significantly increase its wholesale revenue. The conclusion of this agreement, as well as the recapitalisation, allows Cell C to finalise its long-term business plans. PROSPECTS It has been a challenging two years and we are proud of how our Blue Label team has remained focused and optimistic. The Board and Executive Management have decided to focus on doing what we do best. Blue Label’s DNA is trading and distribution. Our strategy remains to efficiently grow our reach through innovation and exceptional customer service. We will also continue to grow our revenue assurance business in the municipal market and continue to develop innovative products in our data solutions and distribution businesses. We look forward to updating shareholders on the progress of the Cell C transactions and thank all our staff, customers and shareholders for their continued support. Mark Levy Brett Levy Joint Chief Executive Officer Joint Chief Executive Officer 29 October 2019