Joint Chief Executive Officers' report

As we consider this year's integrated annual report, we look back over the past few years during which we saw our Group businesses face and overcome various challenges. In 2023, the Group revised its leadership mantra to emphasise diversity and inclusion, with our refreshed values readying the Group to unlock new possibilities.

Where to from here?

For us as CEOs, this question has never been more pertinent in a world that is rapidly digitising with consumer behaviour patterns evolving at an unprecedented pace. The answer, we believe, lies in our ability to do what we are good at - delivering innovative fintech solutions to underserved markets – while continually upping our game.

Let us elaborate on some key aspects of Blue Label's strategy and performance over the past year.

STRATEGY

Blue Labels' RITE strategy continues to be our north star. We are pursuing reach, innovation, trust and efficiency and investing in our in-house platforms to grow the Group's digital footprint.

While Blue Label's roots are in IT and telecommunications, our business has evolved into much more than that. Today, Blue Label is a technology company enabling transactions, innovating products and leveraging data to create value. Our ability to take products to people, rather than expecting people to come to products, is more relevant than ever in today's digital world. This philosophy definitively guides our product development and distribution strategies.

We are proud of our proprietary channels and platforms, as well as our important partnerships, that allow millions of South Africans to access the digital economy every day. We will continue to explore more expedient ways to serve our communities, helping them to bridge the gap and to access necessities such as airtime, data and household essentials.

BLUE LABEL'S FINANCIAL PERFORMANCE AT A GLANCE

Given 2024's difficult operating environment, with high interest rates and loadshedding pressuring our consumers, we report a decline in Group revenue and gross profit for the year. However, gross revenue (which includes the gross amount generated by "PINless top-ups", prepaid electricity, ticketing and universal vouchers) improved from R76.8 billion in 2023 to R89.3 billion this year.

For more detailed information around our financial performance, refer to our Financial Director's report.

TECHNOLOGY AND INNOVATION

Blue Label continues to invest significantly in our technological infrastructure and capabilities. The introduction of artificial intelligence (AI) and machine learning in our call centres, for example, is enhancing efficiency and customer experience. We are exploring ways to integrate these technologies across our business operations in order to drive further efficiencies and to create new value propositions for our customers.

Simultaneously, digitisation carries major cyber risks that we cannot ignore. Our customers, consumers and partners depend on us to safeguard personal information in line with regulations, including the Protection of Personal Information (POPI) Act, and international best practice. The Group continually renews its Information and Communication Technology (ICT) Governance Framework in response to new technologies and challenges, and we enhanced our cybersecurity measures with better threat detection and fraud measures supported by built-in AI. Achieving ISO 27001:2022 (Information Security Management) certification during the year demonstrates our ongoing commitment to protecting personal information.

Blue Label's Blu Voucher exemplifies our ability to innovate and meet market needs. The product has shown phenomenal growth over the past year, a testament to our understanding of consumer needs and our ability to execute. Blu Voucher, along with other innovations such as our emergency electricity advances, brings first-world products to third-world consumers in accessible ways.

CELL C TURNAROUND

Cell C's turnaround strategy has been top of mind for Blue Label and its shareholders for several years. While this investment has at times daunted our investor community and tainted market perceptions, we remain committed to its turnaround. We are most optimistic about the positive signs of change evidenced over the past year. The new leadership team brings a wealth of experience and a strong focus on greater operational rigour and governance. The company has already witnessed major network improvements, including shifting to a virtual radio access network and expanding its base station reach through strategic partnerships, while the focus on network quality and creating a strong brand will continually attract new customers.

All in all, efforts to stabilise the company are clearly starting to bear fruit, although we are mindful that changing direction can take time for a major company like Cell C.