More annual reports from Airtel Africa:
2023 ReportPeers and competitors of Airtel Africa:
PLDTAirtel Africa plc
Annual Report and Accounts 2021
Transforming
lives
Transforming lives
by bridging the
digital divide
Strategic report
1 Airtel Africa overview
8 Chair’s statement
10 Chief executive officer’s review
13 Our investment proposition
14 Our key performance indicators
16 Covid-19 statement
18 Our market environment
20
Legislation and regulation
22 Our business model
24 Our strategy
32 Our stakeholders
38 Business reviews
– Nigeria
38
– East Africa
40
– Francophone Africa
42
– Mobile services
44
46
– Airtel Money
48 Airtel Business
49 Digital Labs
50 Our sustainability ambition
54 Corporate responsibility
60 Chief financial officer’s introduction
to the financial review
Financial review
62
67 Alternative performance measures
72 Managing our risk
79 Our long-term viability statement
Governance report
82 Our Board of directors
86 Our Executive Committee
88 Chair’s introduction
90 Our leadership
97 Board evaluation
100 Audit and Risk Committee report
110 Nominations Committee report
115 Our compliance with the UK
Corporate Governance Code
119 Directors’ report
123 Directors’ responsibilities statement
124 Directors’ remuneration report
Financial statements
140
Independent auditors’ report
150 Consolidated statement
of comprehensive income
151 Consolidated statement
of financial position
152 Consolidated statement
of changes in equity
153 Consolidated statement
of cash flows
154 Notes to consolidated
financial statements
210 Company statement
of financial position
211 Company statements
of changes in equity
212 Notes to company only
financial statements
Other information
214 Forward-looking statements
215 Glossary
218 General shareholders’
information
© 2021 Friend Studio Ltd
File name: Overview_v42
Modification Date: 25 May 2021 4:45 pm
Strategic report Our business is transforming lives
across Africa by bringing telecoms
and mobile money services to almost
118.2 million customers in 14 sub-
Saharan countries.
We’re connecting the unconnected,
reaching the financially excluded
and bridging the digital divide.
And our essential services are
unlocking the potential for people
and economies to grow.
Niger
Chad
Nigeria
Gabon
Republic
of the Congo
Uganda
Rwanda
Democratic
Republic of
the Congo
Kenya
Tanzania
Zambia
Malawi
The Seychelles
Madagascar
Our regions
Nigeria
East Africa
Francophone Africa
© 2021 Friend Studio Ltd
File name: Overview_v42
Modification Date: 25 May 2021 4:45 pm
Airtel Africa plc Annual Report and Accounts 2021
1
Strategic report Providing essential
services, supporting
livelihoods
2
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: Overview_v42
Modification Date: 25 May 2021 4:45 pm
Strategic report Telecoms and mobile money services
are vital in Africa, where too many
people and communities are held back
by large distances and underdeveloped
infrastructure.
As the Covid-19 emergency has shown,
a resilient telecoms network is crucial
to people’s lives and livelihoods.
40.6m
data customers
1.8m+
people financially
empowered
through direct
employment,
business
partnerships
and our
distribution
network
300
schools in
30 counties in
Kenya have been
connected
133m
school age children
in sub-Saharan
Africa had access
to remote learning
© 2021 Friend Studio Ltd
File name: Overview_v42
Modification Date: 25 May 2021 4:45 pm
Airtel Africa plc Annual Report and Accounts 2021
3
Strategic report Serving customers
and creating
opportunities
4
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: Overview_v42
Modification Date: 25 May 2021 4:45 pm
Strategic report By serving our customers, we connect
them to each other, and to future
opportunities. By expanding our network
in both rural and semi-urban areas,
we’re reaching more customers than
ever. And by taking the lead in the rollout
of 4G networks in all our markets, we’re
helping to drive digitalisation.
But while we’re among the leaders in all
our markets, we know there’s more for
us to do. Mobile and digital penetration
in Africa is still low. Populations are
young, and growing fast. Millions of
people are still unbanked or financially
excluded. Millions have yet to join the
digital economy.
Voice
We offer pre- and post-
paid wireless voice
services, international
roaming and fixed-line
telephone services
Data
We offer a suite of data
communications services,
including 2G, 3G and 4G.
We provide 4G services
in all 14 of our markets
Airtel Money
We offer mobile money
services, including
payment services,
microloans, savings
and international
money transfers
Airtel Africa plc Annual Report and Accounts 2021
5
© 2021 Friend Studio Ltd
File name: Overview_v42
Modification Date: 25 May 2021 4:45 pm
Strategic report Building sustainable
value, for all our
stakeholders
6
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: Overview_v42
Modification Date: 25 May 2021 4:45 pm
Strategic report We’re continuing to strengthen our
networks and expand our distribution
channels so we can reach more
customers, with more services.
Growing our business sustainably
means growing our impact: meeting
the critical needs of customers,
economies, and all our stakeholders.
25,368
2020: 22,909
infrastructure
sites
>1.8m
2020: >1.6m
retail touchpoints
(agents and
distributors) in
our network
76.5%
2020: 64.7%
sites providing
4G coverage
54,500+
2020: 43,000+
kilometers of
connecting fibre
© 2021 Friend Studio Ltd
File name: Overview_v42
Modification Date: 25 May 2021 4:45 pm
Airtel Africa plc Annual Report and Accounts 2021
7
Strategic report Chair’s statement
Empowering
customers and
communities in
difficult times
It is clear that just as data and telecoms
services have been essential to people
and economies during the pandemic, they
will also play a vital role in the recovery
across sub-Saharan Africa. By consistently
focusing on serving our customers, we
transform lives and communities while
delivering sustainable, profitable growth.
Sunil Bharti Mittal
Chair
8
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: ChairmansXstatement_v32
Modification Date: 25 May 2021 4:47 pm
Strategic report Many of our customers and
their communities faced
difficult and tragic times
over the last year.
The Covid-19 pandemic has had a deep impact on people’s lives and
livelihoods across Africa, as it has everywhere in the world. This crisis
is not over, though there are promising signs in terms of treatment
and vaccination, and the World Bank and other experts predict a
return to GDP growth in Africa in 2021. It is clear that just as data
and telecoms services have been essential to people and economies
during the pandemic, they will play a vital role in the recovery across
sub-Saharan Africa.
I know that everyone at Airtel Africa is rightly proud of the work we
have done to maintain our services over the last year, and to keep
serving our customers throughout the crisis. For millions of people
across the continent, our services have been a vital link – to family
and loved ones, to their businesses and livelihoods, and to the
wider economy.
It has been a year in which Airtel Africa employees have been true to
our core value, ‘Respectful’: ‘We live the same lives as our customers,
sharing the same joys and the same pains’. And as we support the
recovery and open up opportunities through financial inclusion and
digital empowerment, we will continue to serve our purpose of
transforming lives.
A resilient business, focused
on colleagues and customers
Throughout the year, the Board has been confident that the business
has had the right measures in place to protect our colleagues, who
have adapted to new ways of working so that we could continue
to provide vital services and create value for all our stakeholders.
We have also supported the extensive work carried out to help
our customers, and the programmes put in place to address urgent
needs in our markets, many of which are described on page 16.
By supporting vital services in education and healthcare, and by
working closely with governments to keep networks operational
and make mobile money services more available, we have shown
that not only are our own operations resilient, but we contribute
to the resilience of those around us.
Serving customers to deliver growth and
strengthen our balance sheet
The year has also shown the resilience of our strategy. We have always
aimed to create a model for providing affordable telecoms services that
is sustainable as well as profitable. That means taking account of the
challenges presented by geography and infrastructure, mitigating our
risks, including foreign exchange risks, and growing revenue faster than
the markets in our footprint through a continuous focus on serving
customers’ needs. Our revenue growth of 14.2% in reported currency
in 2020/21 demonstrates this strategy in action.
At the same time, we have a longstanding focus on strengthening our
balance sheet. Our leverage (net debt to underlying EBITDA) improved
to 2.0x (2.1x as of 31 March 2020). Our aim is to continue to reduce
our leverage ratio, and keep it below 2.0x.
During the year, the Board approved a new progressive dividend policy,
which aims to grow the dividend annually by a mid- to high- single-digit
percentage from a base of 4 cents per share for financial year
2020/21, until reported leverage falls below 2.0x. We paid an interim
dividend of 1.5 cents per ordinary share in December 2020. The Board
has recommended a final dividend of 2.5 cents per share.
In March 2021, we took an important step by welcoming both
The Rise Fund and Mastercard as investors in our mobile money business.
The Rise Fund will invest $200m and Mastercard will invest $100m in Airtel
Mobile Commerce BV (AMC BV), a wholly-owned subsidiary of Airtel Africa
plc. This is part of our pursuit of asset monetisation opportunities, and we
aim to explore the potential listing of the mobile money business within four
years. At the same time, we welcome The Rise Fund and Mastercard as
partners in our ambition of banking the unbanked across Africa.
This investment is described on page 47.
Meeting the Board’s priorities
Strong governance remains a core focus of the Board. We were pleased to
welcome Kelly Bayer Rosmarin as a non-executive director when Arthur
Lang stepped down in October 2020 – both are nominees of Singtel.
We announced on 29 April 2021 that Olusegun (Segun) Ogunsanya,
managing director and chief executive officer of Airtel Nigeria, is to
succeed Raghunath (Raghu) Mandava as managing director and chief
executive officer of Airtel Africa plc following Raghu’s informing of the
Board of his intention to retire. Segun will join the Board of Airtel Africa
plc with effect from 1 October 2021.
On behalf of the Board I would like to thank Raghu for being
instrumental in successfully leading and transforming Airtel Africa into
a powerhouse telecoms and mobile money company. Throughout that
time, Raghu has worked tirelessly, first to repair and then to strengthen
Airtel Africa’s business, and to champion our stakeholders. As we look
forward to Segun assuming his new role in October 2021, we do so
from a position of great strength as a result of Raghu’s highly effective
stewardship. Raghu will retire from the Board with our very best wishes
and sincere appreciation for everything he has achieved.
We also announced on the same day that Jaideep Paul, chief financial
officer, has been appointed as an Executive director and will join the
Board of Airtel Africa plc with effect from 1 June 2021.
The company is committed to ensuring that the Board membership
continues to reflect the diversity, breadth of skills and experience
required to drive and support the business strategy going forward.
I am pleased with our continuing efforts to build on our effective
governance structure, described in more detail on pages 90-99.
Making sure our success is sustainable,
for us and others
Our business has always understood that the markets we operate
in have powerful and promising underlying macroeconomic and
demographic trends, and that meeting the demand in underserved
markets goes hand in hand with addressing the challenges faced by
the millions of people who still lack access to effective communications
infrastructure, data services, and to financial services. As well as
investing in our networks and distribution channels to bring us closer
to customers, and enabling financial inclusion through our mobile
money services, the business has consistently delivered targeted
programmes in areas such as education, health and disaster relief
that address local needs and benefit the societies we serve.
We are now going further than ever, with the development of a
comprehensive sustainability strategy that will extend our reach
and impact, and make sure that our work is aligned with the aims of
the UN Sustainable Development Goals. We continue to engage with
all our stakeholders, and we aim to announce our strategy in full later
this year. The Board fully supports this work, which is described on
pages 53-55; and I know it will also have the support of Airtel Africa
colleagues, who already do so much to create opportunity and serve
their communities, and who have shown by their actions this year that
they are committed to transforming lives across Africa. I thank them
for their extraordinary efforts and dedication.
Sunil Bharti Mittal
Chair
11 May 2021
Airtel Africa plc Annual Report and Accounts 2021
9
© 2021 Friend Studio Ltd
File name: ChairmansXstatement_v32
Modification Date: 25 May 2021 4:47 pm
Strategic report Chief executive officer’s review
Progress across all our strategic pillars this year has
meant that despite the challenging times, we have been
able to deliver the ‘win-win’ scenario: where our provision
of essential services to customers and communities has
fed our profitable growth, which in turn sustains our
ability to keep advancing digitalisation and expanding
financial inclusion in underserved markets.
Raghunath Mandava
Chief executive officer
Providing
essential services,
and delivering on
our purpose of
transforming lives
10
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: CEOsXreview_v57
Modification Date: 26 May 2021 8:27 am
Strategic report In this year in which people everywhere have had to
find ways to adapt to new circumstances, I’m grateful
to everyone at Airtel Africa and to all our stakeholders
for helping us ensure that we could continue to
provide essential services in all our markets and
serve more customers than ever before.
strengthening our balance sheet by asset monetisation through
towerco sales, and bringing fresh investment into our mobile money
business. The key risks to our business and the risk mitigation we
have planned are further described in pages 72-78.
While we detail our ‘Win with’ strategy on pages 24-31, I would like
to say a few words on its key strategic elements.
We have all lived and worked under the shadow of the Covid-19
pandemic for more than a year now.
Win with network
While I am hopeful that there are signs of recovery, the pandemic
has had a deep and unprecedented impact on people’s lives and
livelihoods, on their health, and on whole economies. I am very proud
of the work we have done to look after our employees, to help our
communities, and to maintain our services at a time when they have
never been more critical. I am especially proud of how fast, and how
well, our employees adapted, whether working from home or out in the
field, to stay safe while staying close to our customers. They knew that
at times of lockdown or travel restriction, data and voice services were
many people’s only means of contact with their families, and their only
way to do business. Mobile money services became more important
than ever, both as a safe way to do business without cash and contact,
and as a lifeline to people separated from loved ones.
Throughout the crisis, we kept our networks and services running,
and invested in strengthening them further for the future – putting into
action our purpose of transforming lives. At the same time we helped
with national and local efforts during the pandemic – for example by
enabling free access to educational websites for students learning
from home, or providing free airtime for health promotion and Covid-19
messages through our partnership with USAID-funded Breakthrough
ACTION Nigeria and the Nigeria Centre for Disease Control (NCDC).
Our strong business performance underlines once again that serving
and empowering customers and their communities is the only way
to success – and our new sustainability ambition, described on pages
50-53, is designed to ensure that we continue to grow responsibly
and in ways that create even more social and economic value for
our stakeholders.
We talk more about our work during Covid-19 on pages 16-17,
describing its impact on our business, and the measures and
mitigations we put in place to protect our colleagues, support
our communities and keep our customers connected.
Strategic overview
While we have adapted what we do over the last year to make sure
we keep serving customers, our underlying business strategy has
not changed. If anything, Covid-19 has accelerated the trends that
underpin our strategy: a continuous and expanding demand for
mobile money and mobile services from growing populations who
are underserved by infrastructure, especially those in the remote
rural areas of this beautiful continent.
Our aim remains to provide a model which provides affordable
telecoms services in a profitable and sustainable manner, thus
reducing the digital divide and enhancing financial inclusion in the
countries we serve. Our work marches alongside social and economic
development – especially when, as this year, we increase our capacity
and extend the network and distribution to people living far from
the nearest fixed-line infrastructure or financial institutions. And it
demands both innovation and disciplined execution by our teams,
who have once again strengthened our networks and expanded
our distribution channels, allowing us to grow our customer base
to 118.2 million.
Like all good business models, ours relies on a continuous monitoring
and mitigation of risk – including, for us, currency volatility and/or
foreign exchange shortage in some of the economies hit by the
pandemic. Our strategy is designed to overcome these risks by
delivering faster revenue growth with improved profitability,
Our strategy to continuously build on our network in rural areas and
improve network quality and capacity in urban areas helped serve
customers better, when customers were far more dependent on our
networks than ever before. In spite of all the restrictions of movement
and the risks of Covid-19, our teams have achieved our highest ever
network availability. We have added more than 2,400 sites, taking our
total sites to 25,368. Because of the single RAN technology we use, we
now have 94% of our sites on 3G and 76.5% of sites on 4G technology.
Our continuous expansion of fibre to over 54,500km has helped us
significantly expand our data capacities in line with our plan to create
huge data capacities at marginal costs.
Win with customers
We have continued to expand our distribution infrastructure through
a mix of multi-brand outlets, supported by our own exclusive franchise-
run shops and kiosks. Maintaining the momentum of last year, we have
almost doubled our exclusive large-format retail footprint across our
markets, thereby bringing our services much closer to our customers.
Our total exclusive Airtel Money branches and kiosks have grown to
over 10,000 and 37,800 respectively. This has enabled greater
accessibility for new customers to sign up, better recharge availability
and easier access to mobile money during a year when our customers’
movement was often restricted. This supported a customer base
growth of 6.9% and voice revenue growth of 11.0%. Customer
base growth was affected, however, by new customer registration
regulations for telecoms operators in Nigeria, introduced in December
2020 and described on page 20 of this report. Airtel Nigeria is working
with the Nigerian government to ensure that all our subscribers
provide their valid National Identification Numbers (NINs) to update
the existing SIM registration records. The deadline for existing base
has been extended to 30 June 2021. We resumed new customer
acquisition in approved outlets in the second half of April 2021
(see page 21 for further details).
Win with data
This pandemic year has underlined customers’ need for mobile data
as the pace of digitalisation has quickened. In addition to the mobile
data services that we offer, we also increased our focus on our wireless
home broadband products to help people working and studying from
home through a mix of WiFi routers and pocket WiFi devices. We
continued our focus on further expanding our fibre footprint to provide
better connectivity to our enterprise customers. All these initiatives
serve our vision of bridging the data divide.
Simplified pricing and reduction of ‘pay-as-you-go’ (PAYG) rates has
further helped in data adoption, with data customers growing by
14.5%, which along with data usage per customer growing by 44.2%
has led to data revenue growth of 31.2%. Data usage per customer
for the quarter ended March 2021 stands at 2.8 GB per month.
Airtel Africa plc Annual Report and Accounts 2021
11
© 2021 Friend Studio Ltd
File name: CEOsXreview_v57
Modification Date: 26 May 2021 8:27 am
Strategic report Chief executive officer’s review continued
Win with mobile money
We continue to drive the growth of digital financial services on the
continent, thereby serving the wider purpose of extending financial
inclusion to people who have been left untouched by traditional
banking. We have a clear strategy to continue to drive sustainable
long-term growth in Airtel Money with a focus on assured float
availability, distribution reach and increased use cases for
our customers. Higher float availability in the farthest corners
of our markets is helping more individuals, small traders and
businesses to adopt mobile money for their daily business needs.
Our mobile money customer base grew by 18.5%. The increase in
contributions from merchant payments, cash transactions, P2P
transfers and mobile services recharges through Airtel Money have
helped grow our mobile money transaction value even faster at 53.6%,
enabling mobile money revenues to grow by 35.5%.
Win with cost
The pandemic placed heavy pressures on the business in terms
of costs. There have been greater costs for enhancing the safety of
our people, and we incurred costs as movement restrictions were
imposed. Further, huge increases in demand for our services increased
our costs of running towers, due to increased fuel and loading charges.
However, tight monitoring and our efficiency drive, along with
redesigning and eliminating some of our operational activities while
adapting to new ways of working helped to keep cost increases lower
than revenue growth. Greater recharging through mobile money and
other digital means have helped reduce our costs further. Our
incremental capacities were brought in at marginal costs and this
helped keep our EBITDA flow-through on incremental revenue at
59.4%.
Win with people
Our people have been the strongest pillar for us. Our leaders and
managers and our HR teams across the business have shown great
empathy and understanding in helping people cope as our employees
rose to the occasion to serve our customers. My special thanks go to
all those in the field, especially the sales and network colleagues who
made sure our services were up and available for customers even in
remote or inaccessible markets. Even as we went through these
difficult times, our learning and development teams have embarked
on training all leaders in objective selection and performance
management methodologies.
Our empowered OpCo management teams, led by local managing
directors and supported by regional directors, have helped the
organisation be agile and responsive to the changes on the ground.
Transforming lives
Progress across all our strategic pillars this year has meant that
despite the challenging times, we have been able to deliver the
‘win-win’ scenario: where our provision of essential services to
customers and communities has fed our profitable growth, which
in turn sustains our ability to keep advancing digitalisation and
expanding financial inclusion in underserved markets. It is a virtuous
circle that our strategy is designed to maintain and it is a clear
expression of our purpose of transforming lives.
This would not be possible without the hard work of our employees
and the support of our stakeholders. I would like to thank them for
their efforts and their continued dedication to our shared purpose.
In conclusion, I am thankful to Airtel Africa for providing me and
my team the opportunity to transform the business and fulfil our
responsibility to the countries in which we operate. It has been a
privilege to serve in the African continent and I cherish my time here.
Airtel Africa is a remarkable business with fantastic people. Having
been at Bharti Airtel for 13 years and at Airtel Africa for 5 years as
chief executive officer, I feel now is the right time to take a sabbatical.
The last five years have been an exhilarating journey where we have
been able to turn around and transform the business into a strong
high growth and profitable company. We have been able to build the
business with our unique management and problem solving approach
to bring in substantial performance improvement. I am very proud
of what we have achieved over the past five years in Africa, and I look
forward to seeing the Company make even greater progress over
the coming years.
Raghunath Mandava
Chief executive officer
11 May 2021
Transforming lives spotlight
Harnessing the power of mobile
phones to protect people’s health
Covid-19 touched the lives of people and communities across
our markets – and one way we’ve responded is through public-
private partnerships that help protect our customers’ health.
In Nigeria, for example, we gave people the opportunity to
access key Covid-19 messages in five languages on their
phones through our partnership with USAID-funded
Breakthrough ACTION Nigeria and the Nigeria Centre for
Disease Control (NCDC).
We provided free infrastructure and airtime so people could
get critical and reliable information on Covid-19, placing calls to
15 million subscribers and sending out 32 million text messages.
Nearly 190,000 people called the 3–2–1 service to receive
information about Covid-19.
12
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: CEOsXreview_v57
Modification Date: 26 May 2021 8:27 am
Strategic report
Strategic report
Our investment proposition
We operate largely in sub-Saharan African
markets which offer substantial market
potential across voice, data and mobile
money services.
Our countries of operation
boast some of the highest
projected population growth
rates in the world, and the
region currently has low
penetration levels of unique
mobile customers, low
minutes of usage, low data
consumption and limited
traditional banking services.
See our market environment on page 18
© 2021 Friend Studio Ltd
File name: CEOsXreview_v57
Modification Date: 26 May 2021 8:27 am
Our leadership across our markets provides
us with the diversity and scale required to deliver
value-for-money telecom and mobile money
services to our customers. Our well-invested
asset base, strong brand values and recognition,
and effective distribution channels (both direct
and indirect) give us sustainable differentiation
in the market.
We continue to extend our track record of
delivering strong growth and improved
operational performance. We have a lean and
simplified operating model which, combined with
an effective management team, delivers double-
digit revenue growth and strong profitability and
cash flow. Strong country-level management
teams with deep knowledge of their markets are
supported by subject matter experts at Group
level. We also leverage the support of our globally
recognised shareholder Bharti Airtel, one of the
world’s largest telecoms operators.
See our financial review on pages 60-66
We are driven by our purpose of Transforming
lives, with a customer-centric vision of enriching
the lives of our customers. We deliver
sustainable profitable growth through our six
pillar strategy, which is helping us grow ahead
of the industry: ‘Win with…’ network, customers,
data, mobile money, cost and people. And we are
reducing the digital divide and enhancing
financial inclusion, including through partnerships
with governments in the countries where we
operate, while our new sustainability strategy,
which we plan to publish in Q3 2022, will further
embed environmental, social and corporate
governance (ESG) considerations into everything
we do.
Our strategy for growth is described on pages 24-31
See our sustainability ambition on pages 50-53
Our strong balance sheet and conservative
capital structure allow us to deliver the full
execution of our growth strategy, and create
value for all our stakeholders: customers,
communities, regulators and governments,
partners and suppliers, our people,
and shareholders.
Airtel Africa plc Annual Report and Accounts 2021
13
Our key performance indicators
Our KPIs give our
Board and management
a clear sense of where
we’re making progress,
and where we need
to improve.
Measuring the success of our strategy
We monitor the success of our strategy through financial and
operational key performance indicators (KPIs). Our operational
KPIs reflect the measurement of our key strategic pillars: growing
our customer base, strengthening our network, growing voice,
data, and mobile money revenue streams, and improving cost
efficiency. Our financial KPIs monitor our progress in terms of
our profitability ambitions.
As well as helping measure and monitor our progress, our KPIs
help us communicate the Group’s strategy across all levels of the
organisation, and form part of our governance and performance
management process.
Ensuring our KPIs are meaningful
and responsive
To reflect our strategic pillars, our primary operational KPIs include
sites, data capacity, customer base, net additions, churn, average
revenue per user (ARPU), usage per customer, Airtel Money
transactions, and transaction value per customer.
Our key financial KPIs are revenue, underlying EBITDA, operating profit,
profit after tax, operating free cash flow, free cash flow, net debt,
leverage, earnings per share, and return on capital employed. We also
focus on aspects of our business not currently covered by a KPI,
including our environmental and social performance, and on our
workplaces. They will form part of our sustainability strategy, for which
we will announce targets and commitments in Q3 2022 (see pages
50-53 for more details about our sustainability ambition).
We review our operational and financial KPIs regularly to ensure
that they are aligned with our strategy and organisational goals.
See definition and reconciliation of our alternative performance measures
on pages 67-71
Linkage with remuneration
Our remuneration targets are linked with our financial KPIs (revenue,
underlying EBITDA and operational free cash flow). As part of our
long-term incentive scheme, we also benchmark our total shareholder
return performance with a peer group of companies. We review our
remuneration-linked KPIs every year to ensure these are relevant to
our business strategy.
See remuneration committee report on pages 124-138
Operational KPIs
Total sites and data capacity
Total sites number
Total data capacity tb/day
12,070
7,572
25,368
22,909
4,609
21,059
2018/19
2019/20
2020/21
Performance In 2020/21, we deployed
more than 2,400 additional sites,
reaching 25,368 sites in total as of
31 March 2021. During the year, we
added more than 3,400 sites to 3G
(94% of sites are on 3G), more than
4,500 sites to 4G (76.5% of sites are on
4G) and added 11,500km of fibre
(54,500+ km of fibre as on 31 March
2021). Data capacity increased by 59.4%
to 12,070 terabytes (TB) per day, with
peak hour data utilisation at 45%.
Customer base and customer net additions
Customer base m
Customer net adds m
11.8
9.6
98.9
118.2
110.6
2018/19
2019/20
2020/21
Performance Our overall customer
base grew by 6.9% to 118.2 million as of
31 March 2021 – despite no new
customer onboarding in Nigeria since
December 2020 (growth was 10.7%
excluding Nigeria). This reflects our
continuous focus on investment in sales
and distribution infrastructure in urban
and rural markets, including our
exclusive distribution channel of kiosks
and Airtel Money branches. Our
enhanced distribution channel ensures
availability of SIM cards, recharge cards
and money float. Our customer base
grew across all three regions: in Nigeria
by 0.5%, in East Africa by 9.2%, and in
Francophone Africa by 14.5%.
Voice traffic and usage per customer
Voice traffic bn mins
Usage per customer mins
201
250
183
207
Performance Our voice traffic grew
by 29.1% to 322.9 billion minutes in
2020/21. Increase in voice traffic was
driven by our customer base growth
of 6.9%, and an increase of usage per
customer of 16.4% to 234 minutes
per customer per month. Our voice
usage growth was mainly driven by our
expansion of rural network coverage, our
investment in rural sales and distribution
infrastructure, and by customer adoption
of our ‘more-for-more’ voice bundles.
234
323
2018/19
2019/20
2020/21
Voice revenue and voice ARPU
Voice revenue $m
Voice ARPU $
1.7
5.1%
1.6
5.2%
11.0%
1,970
1,915
2,083
2018/19
2019/20
2020/21
Performance In 2020/21, voice revenue
at $2,083m, grew by 11.0% in constant
currency. The voice revenue growth
was driven by an increase in our
customer base of 6.9%, voice usage per
customer growth of 16.4%, partially
offset by rate drop of 14%, largely due to
a decrease in roaming revenue during
Covid-19 and interconnect usage
charges in a few of the East Africa and
Francophone Africa markets.
Constant currency growth for the year ended 2018/19 and 2019/20 is presented
in 31 March 2019 constant currency
Constant currency growth for the year ended 2020/21 is presented in 31 March
2020 constant currency
14
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: KPIs_v64
Modification Date: 26 May 2021 8:13 am
7.61.5Strategic report Data customers, 4G data customers and penetration
Airtel Money customer base and penetration
Data customer m
4G data customer m
Data customer penetration %
30.4%
30.0
5.0
32.0%
35.4
10.2
34.3%
40.6
14.8
25.0
25.2
25.8
Performance Our data customer base
increased by 14.5% to 40.6 million as of
31 March 2021, which now contributes
to 34.3% of our total customer base.
Our data customer base growth was
driven by expansion of our data network,
increase in data capacity and 3G and
4G enabled smartphones. Smartphone
penetration increased to 33%, of which
51% are 4G enabled smartphones.
Our 4G customer base stands at
14.8 million which is 36.4% of our
total data customer base.
Mobile money base m
Mobile money customer penetration %
18.3%
16.5%
21.7
18.3
14.4%
14.2
Performance Our Airtel Money
customer base grew by 18.5% to
21.7 million as of 31 March 2021,
representing 18.3% of our total
customer base. This growth was largely
driven by our expansion of our agents
and merchant ecosystems, the increase
in Airtel Money’s product portfolio
through strategic partnerships, and
continued investment in our exclusive
franchise channel of kiosks and
branches.
2018/19
2019/20
2020/21
2018/19
2019/20
2020/21
Data usage, 4G data usage and data usage per customer
Airtel Money transaction value and transaction value per customer
Data usage megabytes bn
4G data usage megabytes bn
Data usage per customer MB
1,863
711
283
427
1,192
393
57
335
2,686
1,242
708
534
Performance Our total data usage
increased by 74.8% in 2020/21 to 1,242
billion MB. Data usage per customer
per month was at 2.6 GB, an increase of
44.2%, led by an increase in smartphone
penetration, densification of 4G network,
rationalisation of ‘Pay-as-you-go’ (PAYG)
rate and higher adoption of ‘more-for-
more’ data bundles. Additionally, 4G data
usage per customer was at 5 GB while
overall data usage per customer was at
2.6 GB, thereby supporting the usage
growth. 4G data usage more than
doubled and now contributes to
62.2% of total data usage in Q4.
Transaction value per customer $
Mobile money transaction value $bn
46
191
32
167
25
160
Performance Our transaction value
grew by 53.6% in 2020/21 in constant
currency, to $46.0bn. Transaction value
per customer per month was $191, an
increase of 20.9% in constant currency.
This growth in transaction value was
driven by our customer base growth
and increased adoption of Airtel Money
services. Increase in transaction value
per customer was mainly contributed
by person-to-person (P2P), cash-in
and cash-out transactions. Our Q4
annualised transaction value was $51bn
in constant currency.
2018/19
2019/20
2020/21
2018/19
2019/20
2020/21
Data revenue and data ARPU
Airtel Money revenue and ARPU
Data revenue $m
Data ARPU $
2.5
31.2%
2.4
39.0%
1,157
930
2.1
32.1%
683
Performance Data ARPU grew by 8.2%,
and data revenue by 31.2% in constant
currency. Data ARPU growth was
supported by an increase in the number
of 4G customers, who have higher usage
and ARPU than 3G data customers.
The marginal decline in the rate of data
revenue growth compared to last year
was in part due to reduced imports of
handsets across our footprint during
the Covid-19 pandemic.
Mobile money revenue $m
Mobile money ARPU $
1.7
35.5%
1.6
37.2%
401
311
1.5
57.6%
234
Performance Our Airtel Money
revenue was $401m, a 35.5% increase
year on year, and Airtel Money ARPU was
$1.7, up by 6.6% in constant currency.
Revenue growth was driven by our
customer base growth of 18.5% and
transaction value growth of 53.6%. Airtel
Money ARPU growth was supported by
an increase in transaction value per
customer of 20.9%.
2018/19
2019/20
2020/21
2018/19
2019/20
2020/21
Financial KPIs
Underlying revenue*
Underlying EBITDA
and margin
Operating profit
Profit after tax**
Operating free cash flow**
$3,888m
Reported currency +13.6%
Constant currency +19.4%
2019/20: $3,422m +13.8%
$1,792m
(margin 46.1%)
Reported currency +18.3%
Constant currency +25.2%
$1,119m
Reported currency +24.2%
Constant currency +32.8%
2019/20: $901m +25.4%
$415m
+1.8%
$1,178m
+34.9%
2019/20: $408m (4.4%)
2019/20: $873m +24.4%
2019/20: $1,515m +16.3%
(margin 44.3%)
Free cash flow**
$647m
+42.8%
2019/20: $453m
Leverage
2.0x
2019/20: 2.1x
Basic earnings per share
Return on capital employed
9.0 cents
(12.6%)
16.5%
2019/20: 14.0%
2019/20: 10.3 cents
* Underlying revenue excludes
one-time exceptional revenue
of $20m relating to a
settlement in Niger in the
year ended 31 March 2021
** Growth % is in reported
currency
Note: Growth percentages in
KPIs are in constant currency
unless specified
Airtel Africa plc Annual Report and Accounts 2021
15
© 2021 Friend Studio Ltd
File name: KPIs_v64
Modification Date: 26 May 2021 8:13 am
Strategic report
Covid-19
Serving our customers,
safeguarding our people,
minimising risk
The Covid-19 pandemic has contributed to a
rapid acceleration of already existing macro trends
across the countries where we operate, with people,
businesses and governments seeking access to
more and better connectivity and improved financial
inclusion.
These challenging times have shown that the telecoms industry is a
key and essential service for these economies, allowing customers to
work remotely, reduce their travel, stay connected and have access
to affordable entertainment and financial services.
Covid-19 presented significant challenges to the business, particularly
during the initial phase of the pandemic when mobile money and
services growth slowed. However, the actions taken by the Board in the
first quarter ensured the continued execution of our strategy, including
meeting increased customer demand for data, mobile money and mobile
services. We say a huge thank you to all our people, who even during
lockdowns and in times of national crisis managed to keep our
distribution channels available and our networks fully operational despite
increased demand. We also pay tribute to our business partners, who
continued to deliver their services despite numerous logistical challenges,
and to the governments and regulators who continued to support the
industry and helped facilitate our continued support to the economies
of these countries and the communities we serve.
Monitoring the Covid-19 context
in our markets
At the beginning of the pandemic, which coincided with the start of our
financial year, most governments in the countries where we operate
acted swiftly to implement and enforce restrictions on the movement
of people to prevent contagion. These swift actions, along with low
population density, less frequent travel, and local experience in dealing
with contagious diseases, resulted in low infection rates in sub-Saharan
Africa relative to some other regions. In the months that followed, some
restrictions have generally been eased and local economies have
improved, although many consumers still feel cautious about social
and working habits. The pandemic continues to pose a threat to
communities, however, and towards the end of our financial year we
saw further waves in some regions. While this has had no adverse
impact on our business, we will continue to monitor the situation closely.
Around the world the vaccination effort has started, with many
governments hinting at a possible significant easing of social
distancing rules and travel restrictions this year, though it looks like
Africa may lag behind other economies in attaining full vaccination
cover. Despite the resilience demonstrated by our business during
the year, we are constantly monitoring how the situation is evolving
to identify key risks and put in place adequate mitigation plans to
minimise any potential disruptions.
Ensuring our employees are safe,
our networks are serving customers,
and our finances are sustainable
The Group will continue to focus on ensuring the safety of our
employees, our outsourced partners and our customers; ensuring that
our network and distribution channels remain fully operational and
available; ensuring that our customers continue to have access to
financial services; and ensuring that at Group level we have the right
financial position to meet our financial obligations at all times.
Safety for our employees
The Covid-19 crisis has led to profound changes in operating
environments across our markets, and throughout the last year
we continued to reinforce health and safety measures for all our
employees, for outsourced partners and for our customers as
a key priority.
All our offices continue to offer the option of remote working, or
working in shifts and with social distancing practices, depending upon
the critical needs of individual functions. Our OpCos still have a large
percentage of employees working from home with increased digital
access to enable a seamless workflow. All employees continue to be
on full pay and, along with their family members, continue to receive
full medical insurance cover, which includes any diagnostic testing,
associated physician visits related to Covid-19 and vaccination costs.
We have also granted immediate paid medical leave for any employees
diagnosed with Covid-19. More recently we launched an employee
assistance programme, which allows our employees access to free
consultations with mental healthcare professionals. The aim of this
programme is to help employees achieve mental wellbeing by ensuring
harmony between work and personal life and by providing access to
support when employees need to speak to someone.
Safety for our outsourced teams
The outsourced staff in our call centres have all been given the option
and equipment to either work from home with strict data security
protocols, or, if necessary, from the office following strict social
distancing practices and regulatory guidelines. Protective equipment
and hand sanitisers have also been made available within our shops
to keep both our staff and customers safe.
Safety for our customers
We have delivered a range of educational digital campaigns explaining
best practices during the Covid-19 outbreak, and the importance of
being safe. We have significantly enhanced our self-care mobile app
by adding features to enable customers to self-service, removing the
need for a visit to a shop or an agent. We have partnered with other
ogranisations and made a number of online educational platforms
accessible free of charge to give students continuous access to quality
education. Our staff across all our OpCos have also generously
contributed and sacrificed from their salaries a total of $362,000,
which we have matched like-for-like as a company and donated to
the respective governments to support the communities where
we operate.
Resilience for our network
For many of our customers our network remains the main source for
their social interactions, their work and entertainment.
The key business continuity plans we implemented at the start of the
pandemic ensured that both active and passive maintenance services
could be safely carried out even when the movement of people was
restricted. During an increase in data traffic of more than 74%, and
voice traffic of more than 29%, our network did not experience any
significant disruption.
Strengthening distribution
Ensuring customers retain access to our services remains a key
priority for us.
When lockdown restrictions were implemented, we increased stock
levels of SIM cards and recharge vouchers to ensure continued
availability in our shops and enable customers to buy recharges
whenever convenient. We have also encouraged customers to
use digital methods of recharge, including through Unstructured
Supplementary Service Data (USSD), bank portals or our app.
16
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: Covid_19_v52
Modification Date: 26 May 2021 8:14 am
Strategic report In April 2020 we launched the new MyAirtel self-care app in all 14
countries. Using the app, a customer can check airtime or bundles and
purchase them using Airtel Money or any credit or debit cards. It also
has various Airtel Money features so that customers can send money
to Airtel and other operators, pay bills, pay merchants, scan and pay
using Airtel’s or Mastercard’s QR codes and virtual cards, and use
Airtel Money and e-recharge to minimise the impact of any possible
disruption to our distribution network. We have pushed the e-recharge
scheme even further by allowing customers to e-recharge both friends’
and loved ones’ accounts, for which they also receive benefits in
return. As lockdown restrictions have eased we have been able to
expand our distribution, in line with our strategy, and we continued
to carry higher stock levels to mitigate the risks that possible future
restrictions on the movement of people could have on our stock levels
and the ability of customers to access our recharge vouchers.
2021 which will be paid through a mix of cash held as well as from the
proceeds of a $500m inaugural multi-bank long-term facility (part of
the $1.1bn undrawn facilities mentioned above) entered into by Airtel
Africa plc in April 2021. Post this repayment, only $1.5bn of long-term
bonds will remain outstanding for the Group, with the next major bond
repayment of $505m not due until March 2023. In recent months we
have announced several transactions to strengthen our balance sheet,
including asset monetisation through towerco sales, and bringing fresh
investment into our mobile money business amounting in aggregate to
c.$400m, with proceeds expected to be received in the next 12-18
months, which will further improve our financial position and continue
our deleveraging. Additionally, we have agreed longer payment terms
of up to around 12 months with strategic vendors in certain markets to
facilitate continued investment in modernising the network, while also
increasing liquidity.
Maintaining mobile money growth
During the initial phase of the pandemic, mobile money revenue
growth slowed to 26.3% as the business was impacted by social
distancing measures and non-essential service closures, reducing
customers’ ability to deposit and withdraw cash.
Additionally, several governments asked mobile money operators
to waive fees on certain transactions, including person-to-person
and merchant payments. Afterwards, as lockdown restrictions were
generally eased and most fees on transactions reinstated, revenue
growth for the full year rebounded to 35.5%, reaching 38.7% in Q4,
with mobile money contributing over 10.6% of the Group revenue
in the quarter.
We have continued to invest in our network with tangible capex spend
for the year of $614m. This was slightly below our committed spend
of between $650m to $700m, due largely to the delays of import
logistics and on-field deployment challenges during the pandemic.
Our capex guidance for the next financial year remains in the range
of $650m to $700m as we continue to invest in our network and
distribution.
We have identified several ways to retain cash, reduce costs
and mitigate risks from Covid-19. In addition, we have continued to
invest in revenue-driving expenditures, while reducing discretionary
spend.
See page 154 for our going concern assessment
Improving our financial position
Our financial position continued to improve during the year.
Free cash flow increased 42.8% during the financial year and
underlying EBITDA margin continued to improve by 210 bps to 46.1%.
Our net debt to underlying EBITDA ratio improved to 2.0x, despite
investing $247m of intangible capex to renew licences in two of
our biggest markets, Nigeria and Uganda, and acquiring additional
spectrum across several markets. Our cash balances, in conjunction
with more than $1.1bn of committed undrawn facilities, ensure we can
continue to meet our financial obligations. We have $2.4bn in long-
term bonds with the first repayment of $879m (€750m) due in May
Monitoring foreign exchange risk
The global economic slowdown, combined with lower oil and
commodity prices, has resulted in currencies devaluing across our
markets, including the Nigerian naira, Kenyan shilling and Zambian
kwacha.
By far our largest exposure is in Nigeria, which represents 40% of our
revenue and 47% of underlying EBITDA. On a 12-month basis, we
estimate that a 1% Nigerian naira devaluation will have a negative
$14m impact on revenue, $8m on underlying EBITDA and $6m
on finance costs.
See page 79 for our long-term viability statement
Transforming lives spotlight
Reaching out to send
relief payments through
mobile money
The potential for mobile money as a way to transmit payments
safely and transparently has been harnessed by a wide range of
organisations, including governments, UN agencies and NGOs.
This has been particularly true during Covid-19, when Airtel
Money has helped partners such as governments, ministries,
Plan international, Childfund, and UNICEF deliver Covid-19 relief
payment packages to beneficiaries who can then access them
securely and conveniently through their phones. Our current
partnerships will reach more than 200,000 beneficiaries in total.
For our sustainability ambition, see pages 50-53
Airtel Africa plc Annual Report and Accounts 2021
17
© 2021 Friend Studio Ltd
File name: Covid_19_v52
Modification Date: 26 May 2021 8:14 am
Strategic report Our market environment
While the Covid-19 pandemic has touched the
lives of everyone in the communities we serve,
the fundamental dynamics of our markets
have not changed.
A young and growing population, an expanding urban
middle class, limited infrastructure, and people’s
need to connect with each other and with local
and global economies: these factors are all driving
ever-increasing demand for data, mobile voice, and
mobile money services across sub-Saharan Africa.
The result is a continuing opportunity to foster financial inclusion,
bridge the digital divide, and serve more customers in some of the
least penetrated telecoms markets in the world, with just 46%
of the population owning one or more SIM.
Growing connectivity and reliance on mobile
Mobile networks are the primary source of voice and data services
in much of our region, where landline and fixed broadband
infrastructures are limited or, in many places, non-existent. That means
mobile telecoms are a critical resource, essential to people’s daily lives,
to businesses, and to community and state service providers.
Mobile connectivity remains low relative to other markets, but in our
footprint unique users are forecast** to increase by 5.4% each year
between 2020 and 2025, reaching 346 million unique users by 2025,
compared to 267 million in 2020. By expanding and improving our
networks, we help drive this trend – strengthening local infrastructures,
and winning and retaining customers.
Link to strategy
The data opportunity
Digitalisation will be at the heart of Africa’s future growth, and our
region is already seeing a rapid expansion of data usage, despite
relatively low smartphone penetration: around 44% of subscribers
currently have a smartphone.*** Smartphone penetration continues to
grow, and though it slowed in 2020 during the pandemic, the end of
the year saw a return to accelerated uptake.
The availability of 4G is a key factor in the growth of data – one of the
reasons we have led the way in expanding 4G coverage in our
networks – and data adoption has also been spurred on by the growth
of online education and homeworking, trends which continued after
the lifting of Covid-19 restrictions in many markets. Secure, reliable,
competitively-priced data is essential to a wide range of service
providers, and to businesses both large and small – many of which we
serve through our Airtel Business function. Customers are also eager
for simple, well-priced ways to access new content, demand that we
meet through our range of apps including Airtel TV, our digital content
platform, which is now live in nine countries.
Link to strategy
The mobile money opportunity
Limited banking infrastructure means that customers in many of our
markets do not have easy access to traditional financial institutions.
Less than half of the population has a bank account, the lowest
proportion of any emerging market region. At the same time,
e-commerce and the digital economy are taking off, and millions
of potential customers are seeking new ways to transfer, save
and spend money.
The fundamentals for future growth
Africa is one of the world’s fastest growing regions in terms of
population and urbanisation. While each of our markets is unique,
the dynamics in our overall footprint reflect those of Africa as a whole:
33% of the population in our markets is between the ages of 10 and
24, and the population in our footprint is forecast to grow at a CAGR
(compound annual growth rate) of 2.7% between 2020 and 2025.*
The Covid-19 pandemic meant that the region faced severe economic
hardship in 2020, but the International Monetary Fund’s Regional
Economic Outlook forecasts a return to GDP growth in 2021. One of
the factors the IMF identifies as key to that growth is digitalisation.
We aim to be part of the digital transformation of sub-Saharan Africa,
and to offer a mix of products, content and pricing structures that
reach and keep an emerging customer base while providing essential
services that will help underpin the region’s economic recovery.
See our strategy on pages 24-31
*
Source: United Nations (UN) www.un.org
** Data source: omdia.tech.informa.com
*** Source: GSMA SSA Report 2020
**** Source: GSMA Mobile Money Report 2021
18
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: OurXmarketXenvironment_v36
Modification Date: 25 May 2021 5:05 pm
Key to our strategic pillars Win with network Win with customers Win with data Win with mobile money Win with cost Win with peopleStrategic report 3
1
5
2
There is a clear need for mobile money services, both for individual
customers, and for economies seeking to increase financial inclusion
and fuel growth. The regulatory frameworks for mobile money differ
across the region, but overall, active mobile money accounts in
sub-Saharan Africa grew 18% in 2020 to 159 million.**** Airtel Money
is already well-placed to be part of this opportunity. We continue to
build the mobile money ecosystems that help customers join the
digital economy, and to win new customers through services including
inter-operability, payments, microloans and international money
transfers.
Link to strategy
Key market profiles
Top six markets
Our other eight markets
Data sources:
Population and GDP from IMF
Mobile customers and mobile money
customers from respective telecoms
regulatory authorities’ published data
Unique mobile penetration report
from Omdia market analysts
A growing market where serving the customer is key
The mobile telecoms landscape in our region is dominated by a few
large competitors, with some smaller regional companies in some
markets. As well as Airtel Africa, the key players include MTN,
Vodacom, Orange and Tigo.
We compete for customers through our range of services, our
advertising and brand image, the quality and reliability of our service,
our wide coverage, strong data networks, accessibility and availability.
Price and transparency are vital elements of our offer: simple,
understandable pricing plans based on the principle of ‘more for more’,
in a strategy that is tailored to each market.
Link to strategy
Managing risk
Fluctuating currencies, economic volatility and high rates of inflation
can affect some of the economies in sub-Saharan Africa, and may be a
feature of the road to recovery following Covid-19. We manage foreign
exchange and financial risk within our principal risks, described in detail
on page 77.
Link to strategy
Working alongside governments and
complying with regulations
The telecoms sector is highly regulated and, like all operators, we must
work within the frameworks created by governments and regulatory
authorities, covering telecoms regulations, banking regulations,
licences and requirements such as Know Your Customer regulations.
As a telecoms provider, we also have a vital role to play in providing
a critical service, and in helping the countries of sub-Saharan Africa
achieve their goals of digitalisation, financial inclusion and sustainable
development. So alongside strict compliance with regulations, we aim
to work collaboratively with governments to make sure we integrate
our services into their key initiatives, and play our part in strengthening
economies and transforming lives.
Link to strategy
Our statement on the impact of Covid-19 is on page 16
More information on legislation and regulation can be found on page 20
Our top six markets in alphabetical order
1 DRC
Population
GDP
Mobile customers
Unique mobile penetration
Mobile money users
2 Kenya
Population
GDP
Mobile customers
Unique mobile penetration
Mobile money users
3 Nigeria
Population
GDP
Mobile customers
Unique mobile penetration
4 Tanzania
Population
GDP
Mobile customers
Unique mobile penetration
Mobile money users
5 Uganda
Population
GDP
Mobile customers
Unique mobile penetration
Mobile money users
6 Zambia
Population
GDP
Mobile customers
Unique mobile penetration
6
4
2020
90m
$49bn
41m
41%
9m
2019
87m
$50bn
37m
39%
7m
2020
54m
$99bn
61m
61%
32m
2019
53m
$95bn
55m
60%
29m
2020
206m
2019
201m
$429bn $448bn
184m
45%
204m
46%
2020
60m
$63bn
51m
53%
32m
2020
46m
$38bn
28m
43%
23m
2020
18m
$19bn
19m
57%
2019
58m
$61bn
48m
51%
26m
2019
44m
$38bn
27m
43%
17m
2019
18m
$23bn
17m
56%
© 2021 Friend Studio Ltd
File name: OurXmarketXenvironment_v36
Modification Date: 25 May 2021 5:05 pm
Airtel Africa plc Annual Report and Accounts 2021
19
Strategic report
Legislation and regulation
We work with governments and regulators to
create a fair and stable business environment
which adapts to rapid technological change.
We aim to abide by all laws and regulatory
frameworks, and we support governments
and regulatory agencies to drive digital and
financial inclusion.
20
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: LegislationXandXregulation_v21
Modification Date: 25 May 2021 5:06 pm
Strategic report While legal and regulatory frameworks are unique
to each country, they can be broadly classified in
three categories: telecoms services, mobile financial
services and broadcasting services. National
competition law and laws developed by economic
blocks also apply in some of our markets.
Our regulatory environment constantly evolves, and we keep it
under continuous review. We publish significant developments
on our corporate website, under ‘Regulatory news’.
This year, significant developments in our largest markets included:
Licence renewal in Nigeria
In January 2021, Airtel Networks Limited (Airtel Nigeria), announced
that its application for renewal of the spectrum licences in the
900MHz and 1800MHz bands had been approved by the Nigerian
Communications Commission (NCC). Pursuant to Section 43 of
the Nigerian Communications Act, 2003 and Condition 20 of the
Unified Access Service Licence (UASL), Airtel Nigeria applied to
renew the UASL (operations licence) and spectrum licences in the
900MHz and 1800MHz bands which would otherwise expire on
30 November 2021.
Following the application, the NCC offered Airtel Nigeria the
opportunity to renew its spectrum licences in the 900MHz
and 1800MHz bands for a period of ten years, with effect from
1 December 2021 until 30 November 2031, which Airtel Nigeria
accepted. Under the terms of the spectrum licences Airtel Nigeria
paid N71.611bn ($182m) in respect of the licence renewal fees.
The UASL is still under consideration by the NCC and formal
confirmation of renewal is expected before the expiry date of
30 November 2021.
New licence in Uganda
In December 2020, Airtel Uganda Limited (Airtel Uganda) was issued
with a National Telecom Operator (NTO) Licence following a period
of negotiation and transition to a new licensing regime.
The new licence is with effect from 1 July 2020 and is for a period of
20 years, until 30 June 2040. Airtel Uganda will retain all its current
spectrum, subject to the law and terms of assignment. The scope of
services is the provision of basic telecommunication services,
infrastructure services, and value-added telecommunication services.
In addition, Airtel Uganda commits to achieving coverage of 90% of
the geographical boundary of Uganda within five years of the effective
date of the licence, with a minimum obligation of providing voice and
data services.
Under the terms of the licence, Airtel Uganda has paid $74.6m for the
first ten years of the licence, which includes VAT of $11.4m. After the
first 10 years, Airtel will be invoiced for the licence fee for the remaining
10 years.
Under Article 16 of the NTO, Airtel Uganda is obliged to comply with
the sector policy, regulations and guidelines requiring the listing of part
of its shares on the Uganda Stock Exchange. The current Uganda
Communications (Fees and Fines) (Amendment) Regulations 2020
create a public listing obligation for all NTO licensees and specifies that
20% be listed within two years of the effective date of the licence.
New shareholding requirements in Kenya
On 9 April 2021, the Ministry for Information, Communications and
Technology (ICT) published an amendment to the National ICT Policy
Guidelines, 2020 (ICT Policy). The amendment will have an impact on
Airtel’s business in Kenya in the following ways:
• Airtel Networks Kenya Limited, which currently holds an indefinite
exemption from the Ministry for ICT, dated 20 March 2013, has three
years, with effect from 9 April 2021, to comply with the requirement
to have 30% local shareholding
• Airtel Money Kenya Limited, which holds a Content Service Provider
Licence from the Communications Authority of Kenya, with effect
from November 2020, has three years from the date of the licence
to comply with the requirement to have 30% local shareholding.
Under the amended ICT policy, a licensee may apply to the Ministry
for ICT for an extension to comply with the requirement, or obtain
an exemption.
KYC requirements in Nigeria
Following a directive issued by the Nigerian Communications
Commission (NCC) on 15 December 2020 to all Nigerian telecom
operators, Airtel Nigeria has been working with the government to
ensure that all our subscribers provide their valid National Identification
Numbers (NINs) to update SIM registration records.
Initially, new customer acquisitions were barred until significant
progress had been made on linking the active customer base with
verified NINs. Natural churn in the customer base led to a loss of
2.5 million active mobile customers in the final quarter of the year.
The financial impact has been minimal, however, with continued
revenue growth in Nigeria, due largely to the significantly lower ARPU
of the churned base and increased usage by the active customer base.
In April 2021, the NCC announced that it would allow new customer
enrolment from certified outlets. Airtel Nigeria has so far received
interim approvals for around 800 outlets, and new customer
registrations have begun in those outlets.
The directive set an initial deadline for customers to register their
NIN with their SIM of 30 December 2020. This was subsequently
moved several times with the latest deadline set for 30 June 2021.
We have made significant progress on capturing existing NINs and
building the database in collaboration with the National Identity
Management Commission (NIMC). To date, out of Airtel Nigeria’s
42.0 million active customers, we have collated NIN information for
23.2 million active mobile customers. To complete the registration
process, we must also verify the NIN information we have received
from our subscribers with the NIMC.
For the still significant proportion of the population, and of our
customers, that do not have a NIN, we have opened enrolment centres
in collaboration with the NIMC. We are in the process of rolling out
thousands of devices to further NIN enrolment. We continue to work
closely with the government to ensure full compliance.
© 2021 Friend Studio Ltd
File name: LegislationXandXregulation_v21
Modification Date: 25 May 2021 5:06 pm
Airtel Africa plc Annual Report and Accounts 2021
21
Strategic report Our business model
Our dynamic business model delivers value to
stakeholders while transforming lives through
digitalisation and financial inclusion.
Vision
Values
Our vision is to enrich
the lives of our customers.
Our obsession is to
win customers for life
through an exceptional
experience.
Alive
We act with passion and a can-do attitude.
Innovation and an entrepreneurial spirit drive us.
Inclusive
We champion diversity. We anticipate, adapt
and deliver solutions that enrich the lives
of the communities we serve.
Respectful
We share the joy and pain of our customers.
We act with humility and are always open
and honest.
How we create value
Delivering
outstanding
services and
products
Voice
Data
Airtel Money
• Other services,
including fixed-line
telephony, home
broadband and
data centres
Through a unique
distribution network
that is close to
our customers
• More than 48,000 exclusive retail
touchpoints (including minishops,
kiosks and Airtel Money branches)
• More than 200,000 activating
outlets
• A wide network of more than
1.8 million retail touchpoints
• Strategic collaborations with
regional and international partners
to offer financial and money
transfer services
Other key inputs and enablers:
• Efficient Know Your
Customer (KYC) processes
• Easier onboarding processes,
self-service through our self-care
MyAirtel app, currently available in
all markets
An efficient network and business
structure in 14 markets across
sub-Saharan Africa
• Spectrum assets in every
country, with multiple layers
of data capacity
• 25,368 network
towers and data
capacity of 12,000+
terabytes per day
• A modernised network
offering 2G, 3G and 4G,
largely on efficient single
RAN technology
• 54,500+ km of fibre
across our markets
• 3,500+ employees
Other key inputs and enablers:
• Compliance with regulatory
framework in all markets
• A sound capital allocation
strategy and financial
management that targets
revenue growth ahead of the
market and underlying
EBITDA margin improvement
• Mobile network partnerships
that outsource the
management and operation
of our network infrastructure
• A strong management
structure with operating
companies in each market
that can leverage Group
expertise
• Our sustainability ambition
has been aligned with the
UN SDGs and will be
supported by goals and
active policies to respect
human rights, drive positive
social impacts, protect the
natural environment and
conserve resources
• Sound and transparent
governance
• A network of around
2,800 partners,
including mobile
brands, IT companies
and telecoms
infrastructure
providers
22
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: OurXbusinessXmodel_v40
Modification Date: 25 May 2021 5:07 pm
Strategic report
99.2%
of our customers
use pre-paid services
1.8+ million
people financially empowered
through direct employment,
business partnerships and
our distribution network
99%
of customer requests
processed digitally
Our purpose of transforming lives is supported
by our sustainability ambition, described on
pages 50-53
Our strategy is supported by a robust
framework for monitoring and managing risk,
described on pages 72-78
There are many aspects of our strategy and business model that are unique to us. If we had to choose three important ways in which we stand
apart from the competition, they would be:
What makes us different?
Our vision for
data in Africa
We could see that African
customers wanted and needed
data to connect, work and thrive.
We invested in 4G to meet this
demand ahead of the competition,
using single RAN technology to
offer more capacity to customers
at a low incremental cost to
ourselves. We have an extensive,
resilient and reliable 4G network in
most of our markets.
Simple, trusted
pricing and service
Our straightforward pricing
models, simple ‘more for more’
offers and intuitive customer
journeys are helping us to win and
keep customers all over Africa.
A unique
distribution
network
By building exclusive channels
and developing effective
onboarding processes, we’ve
been able to grow our customer
base faster than the market.
Offering
simple customer
journeys and
competitive
pricing
• Simple, convenient and
intuitive customer journeys
• Straightforward pricing
plans based on the principle
of ‘more for more’
• A tailored pricing strategy
that varies depending on
market position
Other key inputs and enablers:
• Marketing and brand-building to
increase consumer awareness
and build customer loyalty
To reach:
118.2m
customers
including
40.6m
data customers
and
21.7m
Airtel Money
customers
See our glossary for
definitions on page 215
Creating value for:
Our customers
• Convenient and
competitive services that
enable people to connect,
live and work
• Financial inclusion
and opportunity through
connections to local and
global economies
Our economies
• Accelerated sustainable
development through
financial inclusion and
‘banking the unbanked’
• Direct and indirect
contributions of $1.4bn in
2020/21 (vs $1.0bn in
2019/20)
• 1.8 million people earning
through working with Airtel
as entrepreneurs and in our
distribution networks
Our people
• Direct
employment
in a growing
business offering
competitive pay
and training
Our communities
• Programmes to
support health, education,
and disaster relief
Our shareholders
• Constant currency
underlying revenue
growth of 19.4%
in 2020/21
• Underlying EBITDA
margin of 46.1%
• Total dividend
of 4 cents
(interim and
final declared)
© 2021 Friend Studio Ltd
File name: OurXbusinessXmodel_v40
Modification Date: 25 May 2021 5:07 pm
Airtel Africa plc Annual Report and Accounts 2021
23
Strategic report
Our strategy
Our ‘Win with’ strategy
aims to drive the
sustainable, profitable
growth we need to
continue creating value
for all our stakeholders.
Our products and services
are helping transform lives
across sub-Saharan Africa by
fostering financial inclusion,
driving digitalisation and
empowering our 118.2 million
customers. To continue to
serve our vision of enriching
the lives of our customers,
we have a clear business
objective: to grow market
share profitably and create
superior enterprise value.
Our ‘Win with’ strategy describes the six strategic
pillars in which we focus our work to achieve our
business objectives. Cutting across all these pillars
is our commitment to transforming lives, driving
sustainable development and acting as a responsible
business – work that is helping us develop our new
sustainability ambition, described on pages 50-53.
Working to enhance digitalisation and financial inclusion with the
governments and institutions of the countries in which we operate
is a central element of our strategy. We aim to help them realise their
goals for sustainable development by working to integrate mobile
services and mobile money usage into their economies. At the same
time, we know that strict and continued compliance with local laws
and regulations and listing requirements are a vital element in our
current and future success.
We aim to act as a responsible business at all times. That means doing
business transparently and with a sound governance structure. It also
means being a good partner and an active contributor to society, by
creating jobs, paying taxes and respecting the environment. We also
support our communities by working with local stakeholders in
our core sustainability programmes: improving digital education,
improving health and supporting communities through disaster relief.
24
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: OurXstrategy_v71
Modification Date: 25 May 2021 5:09 pm
Strategic report
Win with
network
Our strategic intent
We aim to create a leading, modernised
network that can provide the data capacity to
meet rapidly growing demand and enhance
connectivity and digitalisation in our markets.
That means improving basic network uptime
and quality as well as expanding our network
footprint and our 3G and 4G capabilities.
• Focusing on rural coverage expansion
through new site rollouts, recognising that
access to a reliable service is the critical
first step for providing previously
underserved communities with the
opportunity for digital and financial
inclusion
• Focusing on our network resilience
and service continuity
• Building and modernising our network
through optimal end-to-end design,
including spectrum additions, carrier
aggregation, the use of single RAN
technology and fibre rollout
• Expanding 4G coverage and building
capacity
• Delivering voice quality index while
improving network uptime
Our progress in 2020/21
We continue to see delivering the best
4G network in our markets as a key focus,
and our goal is to be the market leader
everywhere we operate. This year we
had an additional focus on resilience and
continuity of service – because we realised
how much our customers and their
businesses depended on us as Covid-19
restrictions curtailed movement and trade.
Increases in sites, coverage, and data capacity
all reflect this priority, and came despite the
complexities imposed by the pandemic.
Our increase in data capacity was driven
in part by the addition of further fibre
connections to our network. This has meant
customers can achieve greater international
connectivity, as well as benefiting from fibre
connections within and between many cities
and urban areas. Similarly, our investment
in new and existing sites has enabled us to
increase data speeds as well as coverage.
How we measure progress
We measure network through a number
of KPIs, described on page 14, including:
Total sites and data capacity: we deployed
more than 2,400 additional sites, reaching
25,368 sites in total as of 31 March 2021.
During the year, we added 3,400 more sites to
3G (94% of sites on 3G), 4,500 more sites to
4G (76.5% of sites now on 4G) and added an
incremental 11,500km of fibre (54,500+ km
of fibre as of 31 March 2021). Data capacity
increased by 59.4% to 12,000 terabytes (TB)
per day, with peak hour data utilisation
at 45%.
See our principal risks on pages 74-77
See our business model on page 22
See our sustainability ambition on pages 50-53
Our network strategy in action
Investing in transformation:
Democratic Republic of Congo
(DRC)
Our investment in our networks provides the infrastructure that
supports sustainable development in many of our markets –
and provides the foundations for all our growth.
In the DRC, for example, our consistent investment in our tower
and fibre network has made us the leading 4G provider in the
country, with 4G coverage for 38% of the population. With 3,500+
km of fibre network and 76.8% of our sites on 4G, we are able to
connect millions of people across the DRC to each other,
to communities across Africa, and to the global economy.
We are market leaders in data, and supply internet bandwidth to
a number of other critical service providers, including government
agencies, public health bodies, multinationals, and UN agencies.
And this year alone we deployed nine Packet Core sites (data
switching centres) in addition to the existing three sites for
disaster recovery and redundancy, making our network even
more resilient.
For our Francophone Africa business, see page 42
Airtel Africa plc Annual Report and Accounts 2021
25
3,500+ km
of fibre network
© 2021 Friend Studio Ltd
© 2021 Friend Studio Ltd
File name: OurXstrategy_v71
File name: OurXstrategy_v71
Modification Date: 25 May 2021 5:09 pm
Modification Date: 25 May 2021 5:09 pm
Strategic report Our strategy continued
Win with
customers
Our strategic intent
We aim to build on our distribution network
to increase our customer base by increasing
mobile penetration through:
• Strengthening our distribution
infrastructure to win more customers by
increasing our depth and width, with more
focus in rural areas
• Enhancing the customers’ experience
through simplified digital customer
onboarding processes, including the
Know Your Customer (KYC) process
• Focusing on higher adoption of ‘more for
more’ bundles to enhance usage and
ARPU, along with reduced pay-as-you-go
rates, making services more affordable
Our progress in 2020/21
We’ve continued to expand our distribution
network to get closer to customers, with a
particular focus on our exclusive franchises, a
unique strength for our business. This helps
us to onboard more customers – and it also
helps us serve them better and in more ways,
enabling recharges and access to mobile
money services.
We’ve also continued to focus on fast,
effective digital onboarding, bringing new
customers to our service in ways that are
compliant with local Know Your Customer
(KYC) requirements while being as efficient as
possible – and which this year also met local
requirements for Covid-19 safety when many
retail outlets were closed. In Rwanda, Malawi,
Gabon and Zambia, we worked with
regulators to achieve temporary permissions
to carry out the biometric elements of KYC
digitally. In Nigeria, we are working as partners
with the government to deliver its national
identity number (NIN) programme, which
makes collecting NINs a requirement for new
and existing customers, including by
operating NIN enrolment centres. Across
every market, we have now developed an app
for digital registration, and most onboarding
processes are achieved in five minutes or less.
How we measure progress
We measure customers through a number
of KPIs, described on page 14, including:
Customer base and net adds: Our overall
customer base grew 6.9% to 118.2 million
as of 31 March 2021, a rate of growth that
was subdued by the sector-wide regulations
barring new customer acquisitions in Nigeria
from mid December 2020 – and excluding
Nigeria, our customer base growth was
10.7% (see our KPI on page 15). The overall
growth reflects our continuous focus on
investment in sales and distribution
infrastructure in urban and rural markets,
including our exclusive Airtel Money
distribution channel of kiosks and branches.
Our enhanced distribution channel ensures
availability of SIM cards, recharge cards
and mobile money float. Our voice revenue
grew by 11.0%.
See our principal risks on pages 74-77
See our business model on page 22
See our sustainability ambition on pages 50-53
Our customers strategy in action
90%+
of new customers
were onboarded
in less than five
minutes
26
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: OurXstrategy_v71
Modification Date: 25 May 2021 5:09 pm
Getting closer to more customers in MalawiExpanding our distribution network so we can get closer to more customers is central to our strategy, giving us the platform to include millions more people in the digital economy, and driving our own sustainable growth.In Malawi this year, we grew our customer base by 31.3% through a rapid expansion of our distribution network and a clear focus on customer needs, including fast onboarding processes and a simple and competitive product offering. At the heart of our expansion were our Airtel Money branches, kiosks, outlets and agents: we increased our Airtel Money branches in the country by 84% in a single year, and more than doubled the number of outlets where customers could register and complete local Know Your Customer requirements. Our focus on speed meant that more than 90% of new customers were onboarded in less than five minutes. Across Malawi, our expansion meant that more people than ever could access financial services through Airtel Money, which grew its customer base by 63%. For our East Africa business review, see page 40Strategic report Our data strategy in action
Meeting customers’ demand
for data in Nigeria
There is demand for data everywhere in our markets, from
remote rural areas to towns and cities across the continent.
Our strategy revolves around reaching more people with data
services by expanding our 4G network, and increasing the
speed and capacity we can provide in areas we already cover,
including through home broadband offers.
Nigeria shows this strategy in action. This year we built L2600
technology into 2,900 additional sites, introduced home
broadband packages in more than 150 towns just when
customers who were working or studying at home needed it
most, and used sales teams and retail outlets to promote WiFi
technology. We focused on price bundles that met customers’
needs, and leveraged a network that now covers more than
78.8% of the population, with 84% of our sites now offering 4G.
The result was that more Nigerians than ever before had access
to the opportunities provided by our data services, while the
overall data traffic we enabled grew by 74.2% year on year.
For our Nigeria business review, see page 38
36.2%
increase in data
revenue year on year
Win with
data
Our strategic intent
We aim to maximise the value of data-based
services and increase data penetration in
all our markets. That means encouraging
smartphone ownership and increasing data
usage at scale, while increasing access to the
digital economy for customers in our markets.
Our approach includes:
• Leveraging our 4G network for data ARPU
and revenue growth
• Smartphone offerings through
partnerships with device OEMs (‘Original
Equipment Manufacturers’) and device
selling outlets
• Building our wireless home broadband
business
• Developing innovative products and data
solutions for corporate and SME customers
through Airtel Business
As part of our expansion of data services,
we have an important responsibility to
keep customers’ data secure. Building and
reinforcing our data security systems will be
a key focus of our sustainability strategy.
Our progress in 2020/21
All our strategic pillars are closely
interconnected, and our success in achieving
our ambitions for data are closely linked
to our ability to extend and maintain fast,
reliable networks, and to being close to our
customers. Being the leading 4G provider
gives us a competitive advantage when it
comes to new customer acquisitions, while
our ability to provide capacity helps drive
usage. The strong presence of our outlets
and our marketing investment support this
network advantage. As our KPIs show, our
customer base and data usage both grew in
2020/21. We also monitor 4G net additions,
which track the number of new devices
coming into our 4G network – 36.4% of our
data customer base has 4G devices.
Another focus for 2020/21 was our launch of
new broadband and wireless home network
solutions, which helped people required to
work from home as well as leisure users.
How we measure progress
We measure data through a number of KPIs,
described on page 14, including:
Data customers, 4G data customers
and penetration: Our data customer base
increased by 14.5% to 40.6 million as of
31 March 2021, and now constitutes 34.3%
of our total customer base. Our total data
usage increased by 74.8% in 2020/21 to
1,242 billion MB. Data usage per customer
per month reached 2.6 GB, an increase of
44.2%. Data usage rises with the mobile
technology used, with 4G data usage
delivering the highest data usage levels,
at 5 GB. 4G data usage more than doubled
and contributed 62.2% to total data usage
as of Q4.
See our principal risks on pages 74-77
See our business model on page 22
See our sustainability ambition on pages 50-53
© 2021 Friend Studio Ltd
File name: OurXstrategy_v71
Modification Date: 25 May 2021 5:09 pm
Airtel Africa plc Annual Report and Accounts 2021
27
Our strategy continued
Win with
mobile money
Our strategic intent
We aim to accelerate the digital ecosystem
by rapidly enabling Airtel Money services
in all our markets, harnessing the potential
of a profitable mobile money business to
enhance financial inclusion in some of the
most ‘unbanked’ populations in the world.
We will achieve this by:
• Efficiently operating the largest branch
network comprising kiosks, mini shops
and dedicated Airtel Money branches,
so customers can access assured float
and cash
• Making Airtel Money the currency of choice
by building on strategic partnerships to
expand local and global acceptance and
deepening in-store and e-commerce usage
• Expanding our mobile money ecosystem
through international money transfer
services, merchant and commercial
payments, benefit transfers, loans,
savings and insurance
• Pro-actively cross-selling Airtel Money
to our mobile services base
• Focusing on technology as an enabler
and competitive advantage
Our progress in 2020/21
We maintained a consistent focus on the
execution of our mobile money strategy,
continuing the key trends from previous
years by focusing on our distribution network,
our cash float availability, and our drive to
increase Airtel Money’s acceptance as the
currency of choice across the financial
ecosystem. As the KPIs show, these measures
have widened our customer base and driven
increased revenues.
Our reach has also been increased by our use
of technology as a key enabler for competitive
advantage. We know that this aspect of
mobile money never stops evolving, and we
have invested in our application programming
interfaces (APIs), which enable us to form
partnerships that create new ways to use
Airtel Money, for example by expanding our
virtual card partnership with Mastercard to
Tanzania and Uganda. In December 2020,
Airtel Uganda, together with our long-term
technology partner Comviva, won three
awards at the Emerging Payments Awards
for our payments and merchant solutions,
supplementing previous awards for our
Airtel Wallet collaboration.
How we measure progress
We measure mobile money progress through
a number of KPIs, described on page 14,
including:
Airtel Money customer base and
penetration: our Airtel Money customer
base grew by 18.5% to 21.7 million in
2020/21.
Airtel Money transaction value and
transaction value per customer: our
transaction value grew by 53.6% to $46bn in
2020/21. Transaction value per customer
grew by 20.9% in constant currency.
Airtel Money revenue and ARPU: Airtel
Money revenue grew by 35.5% in 2020/21.
Airtel Money ARPU was $1.7, up by 6.6% in
constant currency.
See our principal risks on pages 74-77
See our business model on page 22
See our sustainability ambition on pages 50-53
There’s great potential in Tanzania
for us to grow the business and
transform more customer lives
through better distribution and
new services.
Isack Nchunda
Airtel Money Director, Tanzania
Our mobile money strategy in action
© 2021 Friend Studio Ltd
File name: OurXstrategy_v71
Modification Date: 25 May 2021 5:09 pm
Extending our reach and changing the game in TanzaniaAccessibility is at the heart of our mobile money strategy – we need to be close to customers, and we need to assure them that when they come to our outlets, we’ll have the cash float to meet their needs. We’ve had a relentless focus on this aspect of our execution this year – and our performance in Tanzania is a great example of the result. Until recently, we were not a significant player in Tanzania’s mobile money sector – but this year, our mobile money revenues grew by 54.7%, and our customer base grew by 19% to more than 4.5 million. The turnaround was driven in large part by better distribution – we rolled out more than 550 Airtel Money branches and more than 39,000 Airtel agents in the year – supported by effective pricing and the new products and partnerships that are helping us grow the Airtel Money ecosystem everywhere. And we focused on making sure that when customers came to us, we could meet their needs – driving significant increases in our agents’ float balances. The result is a huge improvement in our performance, as well as the creation of around 120,000 income opportunities, and more financial inclusion in a country where only 21% of the population over 14 years of age has a bank account*. For our East Africa business review, see page 40* Source: https://www.theglobaleconomy.comStrategic report Transforming lives spotlight
Going the last mile in Zambia
Airtel Zambia formed a partnership in February 2021 with
the United Nations Capital Development Fund (UNCDF)
to roll out a ‘Last Mile Distribution’ project designed
to extend Airtel Money services to rural areas.
The partnership aims to build a cashless economy
and support the government’s efforts to control Covid-19
while strengthening the digital financial services sector.
“ This project capitalises on the investment we
have made in the country over the years by
building necessary infrastructure, expanding
digital finance and providing the necessary
support to achieving financial inclusion”.
James Chona, Airtel Money Director, Zambia
Transforming lives spotlight
Digitalising essential services
in Rwanda
Our Airtel Money platforms are helping to create whole
new ecosystems that support the delivery of government
services as well as commerce.
In Rwanda, for example, Airtel Africa is playing a key role in
supporting the government’s e-services as part of the
country’s digital-first approach. Airtel Money is plugged
into the e-government facility, and Rwandans can use
Airtel Money to pay for a wide range of services including
marriage certificates, birth certificates and health
insurance, which are then delivered by SMS. Total
transaction value was more than RWF 418m (equivalent
of $420,000) in 2020/21.
Transforming lives spotlight
Mobile technology and
remote working in Uganda
In Uganda, we partnered with Avaya Holdings Corp to enable
organisations to implement remote working and learning
initiatives after the Ugandan government’s implementation
of lockdown restrictions and limited access to offices, schools
and universities to curb the spread of Covid-19.
As a result of our partnership, organisations in Uganda had
full-feature access to Avaya Spaces, a cloud meeting and team
collaboration solution that means colleagues can chat, voice,
video, have online meetings and share content, enabling them
to continue working effectively.
See our sustainability ambition on pages 50-53
Airtel Africa plc Annual Report and Accounts 2021
29
© 2021 Friend Studio Ltd
File name: OurXstrategy_v71
Modification Date: 25 May 2021 5:09 pm
Strategic report Our strategy continued
Win with
cost
Our strategic intent
We aim to achieve an efficient operational
model, leading to an effective cost structure
and improved margins. This enables us to
build large incremental capacity at low
marginal cost.
We will achieve this through:
• Our cost efficiency initiatives, which seek
to optimise site operational and
maintenance expenses, and bandwidth
cost
• A detailed analysis of expenses with the
aim of improving operating margins in
individual markets
• Optimal design for vendor service delivery
• Increasing availability of digital recharges
and self-care services
How we measure progress
We measure cost optimisation through a KPI,
described on page 14:
Underlying EBITDA for 2020/21 was
$1,792m, up by 25.2% versus 2019/20
in constant currency. Underlying EBITDA
flowthrough of 59.4%, as a result of better
controls on operating cost. Underlying
EBITDA margin improved to 46.1%,
an improvement of 210 basis points
in constant currency.
See our principal risks on pages 74-77
See our business model on page 22
Our progress in 2020/21
While operating during the Covid-19 pandemic
created some new costs, including our
expenditure on employee safety, the sharp
rise in demand in 2020/21 demonstrated the
resilience of our cost model, which is focused
on ensuring that we can provide substantial
additional capacity at marginal additional
cost, as the KPI indicates.
This model applies to our fibre networks,
which have significant surplus capacity which
can be utilised at nominal cost, as well as to
our sites, where much of our continuing work
is focused on designing optimal networks,
including through the use of improved
technology such as optimised antenna sizes.
This year, for example, we began working with
antenna designers to increase our use of
single multi-port antennae in sites where
previously several antennae would be
needed, increasing our capacity while limiting
costs and staying within mandatory tower
load requirements. We also continue to invest
in energy-efficient radio equipment.
Our cost strategy in action
Joined up thinking: more capacity,
at lower marginal cost
One of our strategic aims is to leverage the benefits we
enjoy through two related advantages: the strength of
our fibre network, and the fact that many our markets are
contiguous, forming a continuous land corridor across
sub-Saharan Africa.
It means we can increase capacity at marginal cost – which
is at the heart of our strategic intent for cost.
In the Democratic Republic of Congo (DRC), for example,
our substantial investment in 3,500+ km of optical fibre,
described above, demonstrated its value in 2020/21.
Because it connects with our networks in adjacent markets,
we are able to transmit up to 20 GBPS to Kenya from the DRC
via Rwanda and Uganda. That means we can keep the people
and economies of the continent connected, while avoiding the
costs of paying a third party for transfers. And because we
have ensured our fibre networks have ample capacity, we’ll
be able to meet future demand with only a small incremental
increase in operating expenses.
30
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: OurXstrategy_v71
Modification Date: 25 May 2021 5:09 pm
Strategic report 710
leaders from
16 countries
completed
the course
certification
Our people strategy in action
Win with
people
Our strategic intent
We aim to be an employer of choice with
a diverse and inclusive work environment
that continues to foster a culture of high
performance, our colleagues’ wellbeing,
skills enhancement and coaching.
We will achieve this by:
• Accelerating a diverse pipeline of talent to
meet current and future business needs
• Building a dedicated people structure for
Airtel Money, with appropriate systems
and processes
• Improving coaching and functional skills
through our digital learning platform,
functional programmes and cognitive
assessments
• Digitalising our people processes to
improve overall employee experience.
• Refreshing our policies and workplace
facilities to enable a more diverse and
inclusive workplace
Our progress in 2020/21
Our focus over the year continued to be
on three key areas: talent, capability and
technology.
• We onboarded top talent and reduced our
time-to-hire for key roles, made significant
progress on the Airtel Money people
structures and scaled up the Group’s digital
capability through Airtel Africa Digital Labs.
• As a result of our internal development
programmes, 31% of promotions into
senior management/ExCo roles are
internal.
• Through a combination of our digital
learning platforms and in-person training,
we enriched our functional expertise
and on-the-ground coaching. This further
enhanced productivity and performance.
• Keeping our people connected and
engaged remains a priority for us. We did
this by conducting quarterly Group town
halls, including an upward feedback session
through Q&A, and through our annual
strategic and award conclave in which
our people had an opportunity to interact
with the chair, Group CEO and Group CFO.
• Our employee engagement survey
continues to provide us with regular
insight and feedback from our people.
Details of our engagement and
programmes, including our employee
assistance programme, can be found
on page 32 in the stakeholders section.
How we measure progress
We measure our progress on people through
a number of KPIs, including:
Diversity: by gender (26% women in
our workforce, 23% women in ExCo at
the OpCo level) and nationality (employees
from 34 nationalities).
Skills development: delivered key functional
and leadership training through accelerated
on-demand learning programmes, which in
return improved productivity and overall
performance.
Employee engagement: our new annual
employee engagement survey achieved
an 87% response rate, with an overall
engagement score of 79%.
Voluntary attrition: voluntarily attrition rate
dropped from 9.5% to 6.6%.
See our principal risks on pages 74-77
See our business model on page 22
See our corporate responsibility on pages 54-59
See our sustainability ambition on pages 50-53
Airtel Africa plc Annual Report and Accounts 2021
31
© 2021 Friend Studio Ltd
File name: OurXstrategy_v71
Modification Date: 25 May 2021 5:09 pm
‘Licence to hire’: looking to the future, recruiting todayAttracting and retaining the best talent is core to our strategy and that means ensuring that our hiring managers are equipped with the right skills and competencies to select talent.Our mandatory, two-day ‘Licence to hire’ coaching programme was delivered through e-module learning and in-class facilitation to refresh leaders’ knowledge of our DNA and talent acquisition processes using the STAR methodology. The coaching sessions also delved into potential unconscious bias. The programme was launched across Africa, in the UK, and in India to all our employees.Over a period of four months, 710 leaders from 16 countries took the training. Strategic report
Our stakeholders
Staying engaged,
strengthening
relationships,
building trust
Turbulent times make trusted relationships more
important than ever. So despite the challenges
presented by Covid-19, we made sure we adapted
how we engage with our stakeholders, so we could
continue to build understanding and create mutual,
long-lasting value. It has made our relationships
stronger, and added new momentum to our drive
to grow our business and transform more lives.
Engagement with stakeholders happens at all
levels of our business.
Engaging with our stakeholders
and our section 172 statement
This section describes how the directors have acted in relation
to their duties under section 172 (a) to (f) Companies Act 2006
to promote the success of the company with regard to the
needs of wider society and stakeholders, including customers,
consistent with our core business objectives.
In November 2020, our directors received training from our
corporate legal advisers Herbert Smith Freehills (HSF) to
remind them of their duties to apply section 172 to their
considerations and decisions. By considering and applying our
purpose, vision and core values (particularly ‘respectful’)
consistently when delivering our strategy and in our decision-
making, we aim to meaningfully engage with all our
stakeholders regardless of the outcome of any particular
decision.
The information in this section explains how the Board oversaw
stakeholder interests and concerns and considered
stakeholders when making decisions in 2020/21.
How we work to understand
our stakeholders
Our Board seeks to understand the interests of each stakeholder
group and to consider them in their decisions. Directors receive
information about our stakeholders through various channels. This
includes direct interaction and engagement – something we place
much importance on at Airtel Africa. They also receive reports and
updates in Board and committee meetings from our senior leadership
team who engage with our stakeholders – for example, when concerns
and initiatives related to stakeholders are presented to directors by our
Investor relations team or chief human resources officer. We’re working
to make sure Board papers include coverage of relevant stakeholder
interests related to proposed courses of action – and are revising our
Board paper templates and introducing training for people who write
Board and committee papers.
This year our Board hasn’t spent as much time as usual in our markets
and meeting with stakeholders in person due to Covid-19 restrictions,
but we will restart these meetings as soon as it’s safe to do so. Once
travel restrictions have been lifted, Board meetings will take place at
regional locations with representatives from the business present. We
will also arrange regular director visits to local operations.
How we consider stakeholder interests
Our directors foreground stakeholder interests when making key
decisions for Airtel Africa. Sometimes this means considering the
results of a direct consultation, such as the one between our
Remuneration Committee and our shareholders. At other times,
it involves distilling data and other metrics to inform decisions.
Our Board has also established clear business standards to which
stakeholder interests are integral. Our Code of Conduct encompasses
everything from respect for human rights to data privacy to acting
lawfully. This sets out our high expectations for how all of us at Airtel
Africa should act in ways that create value for – and build trust in –
our many stakeholders.
32
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: OurXstakeholders_v43
Modification Date: 25 May 2021 5:15 pm
Our customers
More than 118 million customers across Africa use
our data, voice and mobile money services to
connect, live and work.
How we engaged during the year
Our customers relied on us more than ever this year – and we
developed new channels and ways of working so we could stay
in touch and engaged with their interests and needs.
We collect customer feedback at various points of customers’ Airtel
Africa experience – using these insights to improve our services and
inform our decision-making. In September 2020, we began using
SMS to survey our customers and assess how well we’ve met their
expectations.
Our Board was kept informed of significant customer concerns
and priorities through the CEO’s regular update and continues
to champion the cause for customer-centricity.
Interests and concerns
This year especially, customers wanted to be sure that they could stay
connected to friends, family, work and vital services. That meant
business and network continuity was a particular focus for us. More
widely, our customers want to engage with our products and services
in ways that enhance their quality of life, support their work, and
optimise their leisure – so they can have a seamless customer
experience and be self-sufficient.
Engaging with our stakeholders
Empowering our customers
We know our customers want more ways of
independently accessing our products and services
– particularly online.
So in August 2019, we began to roll out the MyAirtel
app and by April 2020 it was live across our 14
markets. As of March 2021, the app has been
downloaded almost 7.5 million times and is used by
many customers to check their airtime minutes and
buy bundles using Airtel Money or any credit or debit
card. The app also gives customers access to mobile
money services anytime, anywhere.
Also in April, we launched transactional video on
demand (TVOD) services in Nigeria, which allows our
customers to enjoy the latest Nollywood blockbusters
through the Airtel TV app. Airtel TV is now live in nine
countries, with almost 2 million registered users across
Chad, the DRC, Kenya, Madagascar, Niger, Nigeria,
Tanzania, Uganda and Zambia.
Engaging with our stakeholders
Keeping customers safe
The impact of Covid-19 on our customers was
shared at Board meetings by our CEO.
Subsequent Board discussions led to various
safeguarding measures, including:
Self-care app enhancements: more features
to enable customers to serve themselves without
needing to go to a shop or agent
Call centre: a new self-serve channel so that
customers could do more over the phone instead
of going into shops for things like resetting their PINs
and getting PUK codes
E-recharge: we rolled out an online prepaid mobile
facility so that customers could access prepaid plans
without leaving their homes
We also created a Covid-19 information hub on all
14 operating company websites to inform customers
about health tips, Covid-19 hotlines, free educational
portals and more
Outcome and actions
Where restrictions allowed, we observed all locally mandated health
protocols in our Airtel shops so that we could have face-to-face
interactions that were safe for customers and staff. Our in-country call
centres, adapted where necessary so people could work from home,
ran 24 hours a day, seven days a week. We also worked hard to find
‘self-service’ solutions for customers, so they could solve issues or
access services using their phones. In particular, we reached out
through social media to let customers know about our new self-care
channels and processes, including the MyAirtel app.
This year, in response to customer requests, we made a number of
sites across our businesses accessible free of charge to give students
continuous access to quality education.
Airtel Africa plc Annual Report and Accounts 2021
33
© 2021 Friend Studio Ltd
File name: OurXstakeholders_v43
Modification Date: 25 May 2021 5:15 pm
Strategic report
Our stakeholders continued
Our people
Our more than 3,500 full-time permanent employees
in 17 countries represent 34 nationalities and are at
the heart of our success.
How we engaged
Our Board works in various ways to interact with and understand our
employees. Sunil Bharti Mittal is our designated Board director for
employee engagement, given his regular travel to our operating
companies. He reports to the Board on what he learns from his
engagement with our employees. Despite pandemic-related
restrictions, our chair met with senior executives across our operating
companies and headquarters to discuss both personal and
professional matters. This included managing Covid-19,
team capabilities, engagement and continuing to build a high-
performance culture.
We’ve always had an open-door policy, where any employee can
connect directly with the Group CEO or any Executive Committee
member. To this end, we make our ExCo members’ contact details
available in our employee directory. The CEO also covers employee
engagement matters in his report to the Board – and this year, he
shared personal stories of the impact of Covid-19.
The Board also stays on top of employee-related issues through:
• Quarterly CEO-led town halls in English and French where our senior
leaders update employees on our business performance,
organisational changes and take questions from employees
• Chief human resources officer presentations to directors every year
and one-to-one meetings as necessary
• Full quarterly reports to the Remuneration Committee from the HR
Forum and Remuneration Forum chair on people, culture, wellbeing
and the impact of Covid-19. These were shared at Board meetings
by the Remuneration Committee chair
• An employee engagement survey, launched online and carried out
by consultants Willis Towers Watson: 87% of the 3,411 employees
we invited to participate across all markets responded to the survey.
See page 31 for a summary of the findings.
Interests and concerns
Health, safety and wellbeing is a paramount concern for both our
company and employees, and this year that meant taking new steps to
keep employees safe. During the pandemic we made sure employees
stayed on full pay and received full medical insurance, and launched an
employee assistance programme with remote access to mental
healthcare professionals.
See our responsible business section on page 56
Our employees have other interests and concerns beyond health
and safety, of course – including a focus on career development.
This year, we made significant steps in evolving our capability-building
programmes, including through a revamp of our online learning
platforms, and ensuring all employees receive training on our Code
of Conduct and mandatory policies.
The results of our engagement survey showed an engagement score
of 79%, which was benchmarked as in line with local norms. We’re
continuing to build our engagement with employees so we can attract,
motivate and retain the best skilled talent.
Engaging with our stakeholders
Support for our people
during the pandemic
We took range of steps during the year to ensure
everyone’s safety:
• A Covid-19 war room to monitor people’s needs
and provide support
• A cross-functional business continuity planning
(BCP) team which continues to assess potential
risks and refine contingency plans for each OpCo
• Agreed policies for remote working, working in shifts
and social distancing, depending on the needs of
teams
• Full pay and medical insurance for all employees,
including diagnostic testing and physician visits
related to Covid-19
• A new fund to help temporary staff with Covid-19
medical bills
• Paid medical leave for employees with Covid-19
or who needed to care for family members with
Covid-19
• Psychological counselling, personal legal advice
and access to crisis centres through our employee
assistance programme
• Personal protective equipment and hand sanitiser
for staff in offices and shops
Outcome and actions
Our CEO held one-to-one meetings with our operating company
managing directors and other leaders to discuss issues of employee
and personal wellbeing, team updates and career aspirations. We also
put several retention plans in place for our leadership team.
We put several retention plans for the leadership team into place as
a result of one-to-one meetings between the CEO and our operating
company managing directors and other leaders to discuss issues
of employee and personal wellbeing, team updates and career
aspirations.
We’re continuing to consult with employees on how Board members
can better engage with employees and will report on the outcomes
next year. We are planning for non-executive directors to attend more
employee meetings, so that they can engage with colleagues in both
formal and more relaxed settings.
34
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: OurXstakeholders_v43
Modification Date: 25 May 2021 5:15 pm
Strategic report
Communities
Partners and suppliers
We stand with our communities in hard times as
well as good times, and we listen to their concerns
to make sure we remain a force for positive change.
How we engaged
Our CEO reported on the impact of Covid-19 on our communities
at Board meetings during the year. The Board also regularly reviews
our formal programme of community initiatives.
Interests and concerns
Like much of the world, our communities faced a health and economic
emergency in 2020. As well as relying on mobile telecoms to stay
connected and enable essential services, communities looked to
business to help in their time of need.
This year, we will be developing our new sustainability strategy in
consultation with our key stakeholders. This will reflect their interests in
digital transformation and financial inclusion as well as our core
corporate social responsibility activities in projects and activities that
make a real difference to the lives of some of the most vulnerable
people on the continent.
We describe this work in our sustainability ambition on pages 50-53
Outcome and actions
We support the communities in which we operate in many ways, with
a particular focus on creating educational opportunities, improving
health and using our technology for good in disaster situations.
From 2021, we intend to increase our community programmes
through technology and partnerships to meet people’s needs against
the backdrop of the pandemic and other important issues.
The pandemic has had a major impact on health and development
across Africa, and we did not hesitate to lend support through our
products and services, and in cash and in kind. With Group support,
each OpCo took into account the needs of local stakeholders and
supported a range of activities, including:
• Acting on government requests for assistance through our Airtel
Money and digital platforms, removing transaction fees so that
communities could send and receive money for free through our
platform
• Contributing funding to various government institutions directly
dealing with the pandemic across Africa
• Revising the limits for mobile money transactions to support
medium and small businesses
In addition, our employees made voluntary donations to communities
that were matched by the company. This is in addition to the $2.6m
donated by Airtel Africa towards protective equipment for frontline
health workers across Africa.
We provide more details about our community support in corporate
responsibility on pages 54-55
Across Africa, we work with more than 2,800
suppliers, including mobile brands, IT companies
and telecoms infrastructure providers – with the
top 100 suppliers accounting for just over 83%
of our procurements.
How we engaged
During the year, we engaged proactively at both Group and
operational company level with all of our top vendors. Relevant
information from these engagements is communicated to the Board
via the CEO’s report; and the Board’s response is fed back to the
business and the relevant executive by the CEO at his regular ExCo
and business review meetings.
We continued engaging with our vendors while observing social
distancing restrictions. While major conventions such as MWC
Barcelona and AfricaCom were cancelled this year, and direct
meetings with vendors were not possible, we continued meeting
major vendors online at least once each quarter.
These meetings included governance meetings, commercial meetings
and, where necessary, grievance meetings. Our OpCo teams
continued to discuss operational matters with vendors at country level,
and our partners tell us that they continue to value the proactive
approach we take in resolving issues.
Many of our partners were, like us, part of providing essential services
to communities – and we are grateful to partners on the ground such
as fuel vendors and maintenance workers for helping us keep our
networks running and serving customers.
Interests and concerns
We have a strong track record of partnership and many partners seek
us out to discuss win-win solutions. Partners and suppliers also provide
information on the latest developments and support us with the
adoption of new technologies, and we discuss sales and project plans,
bids and proposals, and payments.
Outcomes and actions
In July 2020, we scaled up our partnership with WorldRemit, the global
digital money transfer service operating from over 50 sending
countries to over 150 receiving countries. This partnership will enable
more customers in more places to send and receive money through
Airtel Money.
In the same month, we began working with Mukuru, one of Africa’s
largest remittance organisations with a strong presence in southern
Africa. This partnership will enable Mukuru customers to instantly
send cross-border transfers directly to Airtel Money customer wallets
in 12 African countries.
© 2021 Friend Studio Ltd
File name: OurXstakeholders_v43
Modification Date: 25 May 2021 5:15 pm
Airtel Africa plc Annual Report and Accounts 2021
35
Strategic report Our stakeholders continued
Regulators and governments
Mobile telecoms has been shown to be an essential
service throughout the pandemic, and we have
continued to work closely with governments and
regulators to help in the emergency and build the
digital and financial inclusion that will fuel recovery.
How we engaged
With operations in 14 countries, we work hard to stay ahead of
regulatory changes in different regions. Our Board maintains
a productive and open dialogue with regulatory bodies and
policymakers and sets high standards of governance across
our business.
Over the 2020/21 financial year, we continued to engage with
governments to understand key policy considerations and the
direction in which governments are driving their countries. We take
a multi-layered approach to engaging with regulatory stakeholders
around potential changes to licencing frameworks, market and
competition structures, new government policy initiatives and new
laws affecting our business. In other words, we communicate with
governments and regulators on various levels, depending on the
complexity of the issue and the level of the stakeholder. Some issues
might be dealt with by our regulatory affairs directors, some might
involve the Group chief regulatory officer working alongside the local
team, and others will need the support of our Group CEO or chair.
The Board has empowered the CEOs and chief regulatory officers
of our operating companies to represent them at country-level
engagements with governments and regulators. Management informs
the Board about regulatory developments in the markets on a monthly
and quarterly basis. From time to time, we also commission audits to
verify levels of regulatory compliance.
Interests and concerns
While different governments tailored their approach to the pandemic
to local conditions, a number of concerns arose in several markets.
One was making sure networks were robust enough to accommodate
changes in traffic patterns as people worked from home, which meant
we were temporarily assigned additional spectrum to support network
reconfigurations.
Some governments also took steps to promote the use of mobile
financial services as a safe way of making payments without cash,
and in some markets governments requested that all telecom
companies temporarily waive transactions fees, a request Airtel
agreed to.
At the same time, regulators continued to promote national security,
and in a number of markets added Know Your Customer requirements
– these are described in market environment on page 18.
Outcomes and actions
This has been a year of close cooperation during a health and
economic emergency. Governments across our markets recognised
telecom operators as essential workers, which was a critical step in
keeping our networks open so people and service providers stayed
connected. It meant our employees could continue to maintain
facilities, distribute SIM cards and recharges, and serve customers.
At the same time, we worked with governments and regulators
to ensure that, as people’s behaviour changed through lockdowns
and travel restrictions, our services could adapt.
Engaging with our stakeholders
Our compliance
management system
Over the last reporting year, we rolled out a new way
of managing compliance to our 14 operating
markets. This involves five steps:
1. Understanding and mapping the regulatory
requirements in the specific country
2. Cascading relevant regulatory requirements to
business units so they know what is expected
of them from a compliance perspective
3. Auditing the level of adherence to compliance
requirements – this is done by the regulatory
function, internal audit and sometimes
external auditors
4. Identifying gaps in meeting compliance
requirements, analysing the cause and
proposing remedial action
5. Implementing remedial measures and
repeating the cycle
This process has helped our operating companies
become more aware of the compliance requirements
in their markets, leading to improved compliance
overall.
1
Know your
requirements
5
Follow up on
remedies/efficiency
assessment
2
Promote your
requirements
4
Gaps and
remedies
identification
3
Internal
and external
controls
36
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: OurXstakeholders_v43
Modification Date: 25 May 2021 5:15 pm
Strategic report Shareholders
Our shareholders provide the funding flexibility we
need to execute our strategy, allowing us to deliver
sustainable long-term value to them and all our
stakeholders, and to society.
How we engaged
The Board is updated on investor and shareholder feedback as part of
the CEO’s monthly report to the Board.
We aim to encourage shareholder participation through clear
messaging and reporting and careful review of shareholder feedback.
To this end, in 2020/21 we:
• Held interactive conference calls with analysts and shareholders on
the day of our quarterly results announcements
• Held virtual investor roadshows after publishing our full year and half
year results in May and October, as well as ad hoc meetings and
calls with both existing and prospective shareholders
• Attended online investor and industry conferences throughout the
year to offer existing and prospective shareholders more
opportunities for dialogue with executive management
• Proactively engaged with the sell-side equity research community
• Encouraged shareholder attendance at our virtual first AGM in June
2020, including voting on resolutions proposed through briefings to
analysts and the press
• Collected and reviewed feedback from shareholders on our
engagements with them throughout the year
As set out in the remuneration report, our Remuneration Committee
consults with shareholders each year on remuneration policy and, as
part of this, the committee chair engages directly with shareholders
and their representative bodies.
See pages 124-138 for more details about our Remuneration Committee
Interests and concerns
In addition to investor interest around solid financials, such as
delivering sustainable profitable growth, free cash flow and dividends,
our shareholders also expect to see sustained high standards of
governance at Airtel Africa.
We know that many shareholders are interested in our outlook on
trading and market demand, our guidance for 2021 and beyond, our
progress in improving our natural currency hedging by localising debt
in our operating companies, and our other financial targets and
dividend policy. In light of the increased interest in our approach to
environmental, social and governance-related policies and matters, we
will work closely with our shareholders in developing our sustainability
strategy in 2021.
We describe the relationship with our majority shareholders on page 120
Outcomes and actions
All directors have formal briefings during the year about our investor
relations programme and receive detailed shareholder and institutional
feedback. This enables directors to act on major strategic and
operational decisions with a good awareness of the views of our
shareholders.
In response to increasing demand from investors, and other
stakeholders, we recently embarked on a process to more formally
articulate how our strategy and business model align with
environmental, social and governance best practices. As part of this
process, we have now defined our sustainability framework, our ESG
materiality matrix and the six UN SDGs where we believe we can make
the biggest difference.
Full details of our sustainability ambition can be found on pages 50-53
© 2021 Friend Studio Ltd
File name: OurXstakeholders_v43
Modification Date: 25 May 2021 5:15 pm
Airtel Africa plc Annual Report and Accounts 2021
37
Strategic report Business review: Nigeria
Meeting the needs of customers
and communities, driving digital
transformation
Revenue
Underlying EBITDA
Operating profit
ARPU
$1,552m
Reported currency 13.1%
Constant currency 21.9%
$839m
Reported currency 12.8%
Constant currency 21.6%
$602m
Reported currency 6.5%
Constant currency 14.9%
$3.0
Reported currency 2.2%
Constant currency 10.2%
Revenue ($m)
Revenue split
2020/21
2019/20
1,552
21.9%
1,373
24.4%
Growth % are in constant currency
Underlying EBITDA ($m)
2020/21
2019/20
839
54.1%*
744
54.2%*
* Underlying EBITDA margin
Others
7%
Data
35%
Voice
58%
Summarised statement of operations
Unit of
measurement
$m
$m
$m
$m
$m
%
Description
Revenue
Voice revenue1
Data revenue
Other revenue1
Underlying EBITDA
Underlying EBITDA margin
Depreciation and amortisation $m
$m
Exceptional item
Operating profit2
$m
$m
Capex
Operating free cash flow
$m
Operating KPIs
ARPU
Total customer base
Data customer base
$
million
million
March 2021 March 2020
1,373
850
435
88
744
1,552
897
549
106
839
54.1%
(236)
–
602
275
564
Reported
currency
change %
13.1%
5.6%
26.3%
20.2%
12.8%
54.2% (15) bps
28.9%
(100.0%)
6.5%
(15.3%)
34.6%
(183)
5
565
325
419
3.0
42.0
17.7
2.9
41.8
16.7
2.2%
0.5%
5.6%
Constant
currency
change %
21.9%
13.9%
36.2%
29.7%
21.6%
(14) bps
38.9%
(100.0%)
14.9%
(15.3%)
53.6%
10.2%
This was a year in which
we were focused on our
communities, customers
and employees as much
as our business – and
we learnt once again that
serving our stakeholders
is at the heart of
business success.
The opportunities ahead
are exciting: there is a
clear recognition that
the services we provide
are key to progressing
Nigeria on a new, digital
trajectory of growth.
Olusegun Ogunsanya
MD & CEO, Airtel Nigeria
1 Voice revenue and other revenue includes inter-segment revenue of $1m and $2m respectively in the year
ended 31 March 2021. Excluding inter-segment, voice revenue was $896m and other revenue was $104m
in the year ended 31 March 2021
2 The operating profit in above table includes a CSR (corporate social responsibility) expense of $0.7m in
the year ended 31 March 2021 and $1m in the year ended 31 March 2020
38
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: BusinessXreviews_v93
Modification Date: 25 May 2021 5:18 pm
Strategic report from the prior year. Data ARPU increased 15.3% from increased data
usage per customer, which was up 47.4% in the year from 1.9 GB
per month to 2.8 GB per month. Q4’21 data usage was 3.2 GB per
customer. Data revenue accounted for 35.4% of total revenue in the
year, up 3.7 percentage points from 31.7% in the prior year.
Other revenue grew by 29.7%, with the main contribution coming from
growth in VAS revenue, led by airtime credit services.
Underlying EBITDA grew by 12.8% to $839m in reported currency,
with a constant currency growth of 21.6%. At 54.1%, the underlying
EBITDA margin was broadly in line with the prior year. The slight
decline year on year in the Q4 underlying EBITDA margin to 54.8%
(from 55.5%) was due to increased operating expenses, largely from
the rollout of new sites (over 1,400 added in the year).
Capital expenditure was $275m, marginally lower than the prior year,
largely due to logistical challenges faced during the pandemic.
Operating free cash flow was $564m, up 53.6%, from the combination
of underlying EBITDA growth and capex reduction.
Transforming lives spotlight
Putting our business at the service
of customers and communities
While we never lost sight of how crucial it was to keep our
mobile and data services running in Nigeria during the
Covid-19 pandemic, we also looked for innovative ways we
could help our communities through the worst of the crisis.
We used our platforms to make sure people got the
information they needed – both about Covid-19 (see page 12
for a description of our communications work on behalf of the
National Center for Disease Control (NCDC)), and for their
education, through partnerships that meant vulnerable
children continued to get access to online learning resources.
At the same time we supported the government’s efforts to
combat Covid-19, including through a N200m (equivalent of
$525,000) donation to refurbish and equip a specialist unit at
the Lagos University Teaching Hospital, and donations to the
Ogun State government to support Covid-19 testing through a
molecular laboratory. We also supported the Nigerian Port
Health Authority, provided toll-free lines to the 36 State
Government offices, and donated N50m (equivalent of approx.
$132,000) to Lagos State Government to procure personal
protective equipment (PPE) for Lagos State health workers,
among other initiatives. Our employees led the way: through
our Employee Volunteer Scheme (EVS), they donated N20m
(equivalent of approx. $52,500) from their salaries to the Lagos
State government to provide relief materials and palliative
packs to vulnerable families and individuals.
Our market
Nigeria is Airtel Africa’s largest single country market – and as an
enabler of Nigeria’s rapidly expanding digital economy, we see great
potential for continued growth as we create opportunities and value
for our customers and shareholders.
Nigeria has a growing population of more than 200 million people,
more than half of whom are under 30 years old – and the Nigerian
government, as well as external experts such as the World Bank, see
digital entrepreneurship as an engine of economic transformation for
the country.
We are well-placed to continue serving this need, investing this year
in network upgrades to boost capacity and reinforce resilience, and
making further progress on expanding our distribution network, while
developing our offer to customers. New National Identity Number
(NIN) regulations introduced in December 2020, which require every
phone user to have a registered NIN, have temporarily slowed
customer onboarding across the telecoms sector, as we describe on
page 21. Despite this, we have widened our customer base during the
year overall, and seen a rapid rise in data consumption contributing to
double-digit revenue growth. In January 2021, we renewed our
spectrum licences in the 900MHz and 1800MHz band, valid for ten
years from 1 December 2021 – an important development we
describe on page 21. We continue to progress our application for
a licence to offer payment services independently, as we see a major
opportunity to complement our existing financial services partnership
with a local bank, which uses our platform for financial transactions.
We also closely monitor Nigeria’s foreign exchange situation: our
analysis of foreign exchange risk is described on page 17 in our
Covid-19 statement.
Our focus on customers, communities and employees has been more
important than ever this year. As everyone in Nigeria tackled the
urgent demands of Covid-19, our teams pulled together to provide vital
support, whether through testing centres, free SMS and data services,
or resilient services that were essential to people’s everyday lives and
the national response. It was an effort that we can recall with pride as
we help our communities build back stronger in 2021.
For more information on our response to Covid-19, see page 16
Other market participants
• MTN
• Globacom
• 9 Mobile
Our performance
Revenue grew by 13.1% in reported currency, with constant currency
growth of 21.9% offset by Nigerian naira devaluation of 10% (YoY).
Reported currency revenue grew by 12.0% in Q4’21, and 22.9% in
constant currency.
Voice revenue grew by 13.9% in the year. This was driven by customer
base growth of 0.5%, and voice ARPU growth of 2.9%, supported by
an increase in voice usage per customer, up 12.4%. The customer
base growth was supported by continued expansion of our distribution
network and network infrastructure, with a slowdown in customer
base growth in the second half of the year attributable to new Know
Your Customer (KYC) requirements in Nigeria. In Q4’21, voice revenue
grew by 12.9% in constant currency, mainly driven by voice ARPU
growth of 7.5%, largely due to increased voice usage per customer.
Data revenue continues to be the key driver of Nigeria revenue growth,
with constant currency revenue growth of 36.2%. This was driven by
5.6% growth in the number of data customers, and 15.3% growth
in data ARPU. The data customer base growth was supported by
expansion of our 4G network, with 84% of total sites now on 4G. Data
customer penetration increased to 42.1%, up 2 percentage points
© 2021 Friend Studio Ltd
File name: BusinessXreviews_v93
Modification Date: 25 May 2021 5:18 pm
Strategic report Business review: East Africa
Opening up access to
essential services, helping
millions stay connected
Our services helped
governments, health
workers and
communities through
the Covid-19 pandemic
by disseminating safety
information, enabling
commercial transactions
and keeping
communities connected
through our voice and
data platforms. We will
continue to work with
all our stakeholders to
ensure that our services
remain accessible and
affordable as a key
element of our strategy
for continued growth.
Ian Ferrao
Regional director, East Africa
Revenue
Underlying EBITDA
Operating profit
ARPU
$1,381m
Reported currency 15.0%
Constant currency 23.5%
$631m
Reported currency 30.0%
Constant currency 40.2%
$408m
Reported currency 53.7%
Constant currency 67.8%
$2.3
Reported currency 2.5%
Constant currency 10.0%
Revenue ($m)
Revenue split
2020/21
2019/20
1,381
23.5%
1,201
13.6%
Growth % are in constant currency
Underlying EBITDA ($m)
Others
6%
Mobile
Money
21%
2020/21
2019/20
631
45.7%*
485
40.4%*
Data
26%
Voice
47%
* Underlying EBITDA margin
Revenue contribution of others includes eliminations
Summarised statement of operations
Unit of
measurement
$m
$m
$m
$m
$m
$m
%
Description
Revenue2
Voice revenue3
Data revenue
Mobile money revenue4
Other revenue3
Underlying EBITDA
Underlying EBITDA margin
Depreciation and amortisation $m
$m
Exceptional item
Operating profit5
$m
$m
Capex
Operating free cash flow
$m
Operating KPIs
$
ARPU
million
Total customer base
Data customer base
million
Mobile Money customer base million
March 2021 March 2020
1,201
606
307
213
131
485
1,381
650
354
291
150
631
45.7%
(221)
–
408
249
382
Reported
currency
change %
15.0%
7.4%
15.4%
36.1%
14.2%
30.0%
40.4% 529 bps
(3.7%)
(100.0%)
53.7%
37.5%
25.6%
(229)
10
266
181
304
2.3
53.1
16.2
18.0
2.2
48.6
13.3
15.5
2.5%
9.2%
21.5%
16.4%
Constant
currency
change %
23.5%
15.4%
23.9%
47.2%
20.8%
40.2%
541 bps
2.5%
(100.0%)
67.8%
37.5%
42.0%
10.0%
1 The East Africa business region includes Kenya, Malawi, Rwanda, Tanzania, Uganda and Zambia
2 Revenue includes intra-segment eliminations of $64m for the year ended 31 March 2021 and $56m for the
year ended 31 March 2020
3 Voice revenue and other revenue includes inter-segment revenue of $1m and $3m respectively in the year
ended 31 March 2021. Excluding inter-segment, voice revenue was $649m and other revenue was $147m
in the year ended 31 March 2021
4 Mobile money revenue post intra-segment eliminations with mobile services was $227m for the year
ended 31 March 2021 and $157m for the prior year
5 Operating profit includes a CSR (corporate social responsibility) expense of $1.7m in the year ended
31 March 2021
40
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: BusinessXreviews_v93
Modification Date: 25 May 2021 5:18 pm
Strategic report Transforming lives spotlight
‘Let’s Read’: working in partnership
to help improve education for
1.4 million children
We have a long track record of supporting education projects
by harnessing our data and network capabilities, which will
continue to be a focus of our new sustainability strategy.
Our partnership work in Zambia is a great example: this year we
partnered with the ‘Let’s Read’ project being rolled out to five
provinces in Zambia as part of a USAID funded five-year
programme led by the Education Development Center, Inc. (EDC).
Airtel Zambia provided more than 2,000 data SIM cards for the
programme, to support the development of primary school
teachers with the aim of improving the reading outcomes for
approximately 1.4 million children attending pre-primary
(kindergarten) through Grade 3.
See our sustainability ambition on pages 50-53
Our performance
East Africa delivered a strong business performance with revenue
growth of 15.0% in reported currency and 23.5% in constant currency.
The growth in revenue was evident across all key business segments;
with voice up 15.4%, data up 23.9% and mobile money growing 47.2%
in constant currency. Constant currency revenue growth of 23.5% was
partially offset by currency devaluation, mainly in Zambia and Kenya.
Reported currency revenue grew by 15.4% in Q4’21, and 23.9% in
constant currency.
Voice revenue grew by 15.4% for the year, driven by customer base
growth of 9.2% and voice ARPU growth of 2.9%. Customer base
growth was driven largely by the expansion of our distribution network,
with the number of activating outlets up 15.5%. Voice ARPU growth
was driven largely by the increase in voice usage per customer of
18.3%, to 330 minutes per customer per month. In Q4’21, voice
revenue grew by 15.5% in constant currency, mainly driven by the
customer base growth of 9.2% and ARPU growth of 5.3%.
Data revenue grew by 23.9%, driven by data customer base growth
of 21.5% and data ARPU growth of 1.1%. Growth was recorded
across all OpCos in the region, driven by expansion of our 4G network
infrastructure, with 76% of sites now on 4G in East Africa, compared
with 66% during the prior year. Total data usage on the network grew
by 70.7%, led by the 39.3% increase in data usage per customer per
month to 2.7 GB per customer from 1.9 GB in the prior year, and from
the data customer base growth.
During the period ‘pay-as-you-go’ (PAYG) tariffs in certain markets
were revised and this resulted in change of revenue allocation of
bundled products between voice and data in these tariffs. On a
like-for-like basis, voice and data revenue growth was 11% and 32.6%
respectively.
Mobile money revenue grew by 47.2%, largely driven by growth in
Tanzania, Zambia, Uganda and Malawi. Revenue growth was driven
by 16.4% growth in the customer base and 28.6% growth in the
transaction value per customer, thanks largely to the expansion of our
distribution network. The increase in transaction value per customer
was the main contributor to mobile money ARPU growth of 16.0%.
Consistent with the year, Q4 posted mobile money revenue growth
of 47.8% in constant currency.
Underlying EBITDA margin was 45.7%, an improvement of 529 basis
points in reported currency and 541 basis points in constant currency,
led by both accelerated growth in revenue and efficiency improvement
in operating expenses.
Capital expenditure was $249m, up 37.5% due to planned network
expansion. Operating free cash flow was $382m, up 42%, largely due
to the growth in underlying EBITDA.
Airtel Africa plc Annual Report and Accounts 2021
41
Our market
Our six markets in East Africa have some of the youngest and
fastest-growing populations in the world – and mobile, digital and
financial services are essential to their future opportunities.
To continue serving our customers, we’re focused on making our
services accessible. That has meant continuing to invest in network
upgrades: our Kenya and Tanzania 4G networks are now best-in-class,
and we continue to maintain 4G leadership in Malawi, Uganda and
Zambia. We have significantly improved our customer experience by
using the Airtel app to enhance digital support, and by simplifying
customer journeys on our platforms. We also continue to deploy our
distribution network closer to our customers by rolling out more
service centres across urban and rural areas. Perhaps the strongest
example this year has been the expansion of our Airtel Money branch
and kiosk footprint by 73.4% and 11.5% respectively, which has
brought financial inclusion and connectivity to more customers while
driving significant growth for our business.
The Covid-19 pandemic, which continues to have an impact on
people’s lives across our markets, has again shed light on how crucial
telecoms services are to our communities and economies. Over the
course of the year, we helped millions of families and businesses stay
connected. The pandemic has also accelerated the adoption of new
ways of working that bridge barriers between homes, offices and
business places, and we have pushed forward with the expansion
of our FTTH (Fibre To The Home) and FTTB (Fibre To The Business)
portfolios, which both rely on our 54,500+ kilometres of fibre across
Africa. Above all, the year has shown that we are all at our strongest
when we work together with all stakeholders, including governments,
the health sector, communities, businesses and our customers.
For more information on our response to Covid-19, see page 16
Other market participants
• Kenya – Safaricom and Telkom
• Malawi – TNM
• Rwanda – MTN
• Tanzania – Vodacom, Tigo, Halotel and TTCL
• Uganda – MTN, UTL and Africell
• Zambia – MTN and Zamtel
© 2021 Friend Studio Ltd
File name: BusinessXreviews_v93
Modification Date: 25 May 2021 5:18 pm
Business review: Francophone Africa
Return to sustainable growth
founded on strong networks and
getting closer to customers
This was a year which
showed once again
how our products
and services are
supporting customers
and economies in
markets which were
previously underserved
by financial and
communications
infrastructure. And it
showed that the delivery
of our strategy, with a
focus on distribution,
network and pricing,
can meet these
customer needs while
fuelling our growth.
Michael Foley
Regional director, Francophone Africa
Underlying revenue
Underlying EBITDA
Operating profit
ARPU
$964m
Reported currency 12.3%
Constant currency 10.0%
$364m
Reported currency 24.6%
Constant currency 21.7%
$170m
Reported currency 86.7%
Constant currency 80.5%
$3.8
Reported currency 3.6%
Constant currency 1.5%
Underlying revenue ($m)
Revenue split
2020/21
2019/20
964
10.0%
859
–0.5%
Growth % are in constant currency
Underlying EBITDA ($m)
Others
7%
Mobile
Money
11%
2020/21
2019/20
364
37.7%*
292
34.0%*
Data
26%
Voice
56%
* Underlying EBITDA margin
Revenue contribution of others includes eliminations
Summarised statement of operations
Unit of
measurement
$m
$m
$m
$m
$m
$m
%
Description
Underlying revenue2
Voice revenue3
Data revenue
Mobile money revenue4
Other revenue
Underlying EBITDA
Underlying EBITDA margin
Depreciation and amortisation $m
Exceptional item5
$m
Operating profit6
$m
$m
Capex
Operating free cash flow
$m
Operating KPIs
$
ARPU
million
Total customer base
Data customer base
million
Mobile Money customer base million
March 2021 March 2020
859
525
189
93
86
292
964
541
254
110
96
364
37.7%
(207)
14
170
88
276
Reported
currency
change %
12.3%
2.9%
34.4%
18.1%
11.5%
24.6%
34.0% 372 bps
9.7%
(217.8%)
86.7%
(33.9%)
73.2%
(189)
(12)
91
133
159
3.8
23.1
6.7
3.6
3.7
20.2
5.4
2.8
3.6%
14.5%
24.6%
30.6%
Constant
currency
change %
10.0%
0.5%
31.9%
15.0%
11.0%
21.7%
363 bps
7.7%
(209.6%)
80.5%
(33.9%)
68.2%
1.5%
1 The Francophone Africa business region includes Chad, Democratic Republic of the Congo, Gabon,
Madagascar, Niger, Republic of the Congo, and the Seychelles
2 Underlying revenue includes intra-segment eliminations of $36m for the year ended 31 March 2021 and $34m
for the year ended 31 March 2020. It also excludes a one-time exceptional revenue of $20m relating to a
settlement in Niger in the year ended 31 March 2021
3 Voice revenue includes inter-segment revenue of $3m, excluding inter-segment the voice revenue was $538m
in the year ended 31 March 2021. Voice revenue represents underlying revenue excluding the impact of a
settlement in Niger ($20m)
4 Mobile money revenue post intra-segment eliminations with mobile services was $74m in the year ended
31 March 2021 and $59m in the year ended 31 March 2020
5 Operating exceptional items in the year ended 31 March 2021 includes exceptional revenue from a one-time
settlement in Niger amounting to $20m
6 Operating profit includes a CSR (corporate social responsibility) expense of $1.1m in the year ended 31 March 2021
42
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: BusinessXreviews_v93
Modification Date: 25 May 2021 5:18 pm
Strategic report year. The data customer base growth was driven largely by the
expansion of our 4G network, with 60% of total sites now on 4G, and
the success of our ‘more for more’ bundle offerings, driving data
uptake by customers.
Mobile money revenue grew by 15.0% largely driven by a 30.6%
increase in the mobile money customer base, supported by the
expansion of our distribution network through more agents (up 29.6%)
and Airtel Money branches (up 91.5%).
Underlying EBITDA margin was 37.7% during the period, an
improvement of 363 basis points in constant currency. The Q4’21
underlying EBITDA margin of 42.1%, reflects an improvement of 9.4
percentage points in constant currency, driven by revenue growth and
increased efficiency in operating expenses.
Capital expenditure was $88m, lower for the year, mainly due to a
significant network modernisation project last year. Operating free
cash flow was $276m, up 68.2% year on year, due to the improvement
in underlying EBITDA and lower capital expenditure.
Our data strategy in action
Digitalisation through 4G
connectivity: Niger
The success of our data business in Niger provides a clear
example of how focusing on the reach and quality of our
network can drive growth by bringing more customers
across the digital divide.
We’re the network leaders in the country, the first business to
bring 4G coverage to Niger’s cities, and the operator with the
largest combined 3G and 4G network. And we’ve expanded
our network to cover an increasing number of rural areas,
bringing internet access to many places for the very first time.
We put that network strength and speed to good use by
focusing on connecting new smartphone customers to 4G,
and converting existing customers, while also driving adoption
of home broadband, including through pocket Wi-Fi technology
that allows 3G smartphone users to connect to the 4G network.
And we’ve made sure we’re making the right offer to our
customers, reviewing all our data packages and building trust
with our customers through transparent bundle deals.
The result is that more people than ever before in Niger now
have access to data and the digital economy. We’ve seen a rise
in data usage, a rise in data customers, and an increase in data
revenue of nearly 46% this year.
Our network has the potential to transform Niger, provide a
solid platform for building the country’s digital economy, and
empower its people.
Our market
Demand for voice, data and mobile money products continued to grow
in a year which showed more than ever how essential our services are
to human connection and economic resilience.
More than 165 million people live in our Francophone Africa segment,
which is made up of Chad, Democratic Republic of the Congo, Gabon,
Madagascar, Niger, Republic of the Congo, and the Seychelles. This
year, we got closer to many more new and existing customers through
the rapid expansion of our distribution network, increasing our retail
outlets by 43.7% to over 65,000. This expansion was made possible
by our continuing investment in our network’s capacity and resilience.
Major projects this year in Niger and Chad serve as an example of our
work in building infrastructure that is bringing communities into the
mobile and digital ecosystem. Across the segment around 60% of our
sites are now on 4G.
This growth in capacity came at the right time for customers facing
new challenges brought about by the Covid-19 pandemic. Our field
teams were able to keep working as essential service providers,
increasing both the quality and availability of our network as people
turned to mobile voice and data to stay connected and keep
businesses running. We also helped meet the need for mobile
money services within economies and households, by expanding
the availability of Airtel Money services at the height of the pandemic.
Our expanded network of Airtel Money branches and kiosks
supported a substantial increase in our mobile money customer
base and transaction volumes across the region.
With a strong foundation provided by our networks and expanded
distribution footprint, combined with the region’s young and growing
populations, we see huge opportunities to continue serving customers
and driving sustainable growth for us, and the communities we support.
For more information on our response to Covid-19, see page 16
Other market participants
• Chad: Maroc, Sotel
• DRC – Vodacom, Orange and Africell
• Gabon – Moov (Maroc Telecom)
• Madagascar – Orange and Telma
• Niger – Zamani, Moov (Maroc Telecom), Niger Telecom
• Republic of the Congo – MTN
• Seychelles – Cable & Wireless and Intelvision
Our performance
Our performance in Francophone Africa improved through the year,
with reported underlying revenue growth of 12.3% and constant
currency growth of 10%. The growth in reported currency is higher
than in constant currency due to appreciation of the Central African
franc. Performance across the region was mixed, with revenue growth
in Chad, Democratic Republic of the Congo (DRC), Gabon and Niger,
partially offset by marginal decline in other countries in the region.
In Q4, revenue growth was significantly higher, at 20.9% in reported
currency and 15.9% in constant currency.
Voice revenue growth was broadly flat at 0.5%. This marginal
underlying growth reflects 14.5% growth in the customer base
(largely coming later in the year) balanced with a decline in voice
ARPU due to a reduction in roaming revenue and interconnect rates.
Q4’21 reflected an improvement in voice revenues of 7.3%, driven
by customer base growth of 14.5% offset by a slight decline in voice
ARPU of 3.6%, mainly due to reductions in roaming revenue and
interconnect rates in Chad and Gabon. Q4’21 total voice minutes
on the network grew by 27.0% due to increased voice usage per
customer (up 14.1%) and customer base growth.
Data revenue grew by 31.9% driven by customer growth of 24.6% and
data ARPU growth of 2.8%. Data usage per customer increased 51.7%
to 1.9 GB per month, from 1.3 GB per customer per month in the prior
© 2021 Friend Studio Ltd
File name: BusinessXreviews_v93
Modification Date: 25 May 2021 5:18 pm
Strategic report Business review: Mobile services
Strong performance in all 14
markets driven by transparency,
access and leadership in 4G
Underlying revenue
Underlying EBITDA
Voice ARPU
Data ARPU
$3,592m
Reported currency 11.9%
Constant currency 17.6%
$1,639m
Reported currency 19.5%
Constant currency 26.5%
$1.5
Reported currency (4.6%)
Constant currency 0.1%
$2.5
Reported currency 2.5%
Constant currency 8.2%
Voice revenue ($m)
Data revenue ($m)
2020/21
2019/20
2,083
11.0%
1,970
5.2%
2020/21
2019/20
1,157
31.2%
930
39.0%
Growth % are in constant currency
Growth % are in constant currency
Summarised statement of operations
Unit of
measurement
$m
$m
%
Description
Underlying revenue1
Underlying EBITDA
Underlying EBITDA margin
Depreciation and amortisation $m
$m
Operating exceptional items
Operating profit2
$m
$m
Capex
Operating free cash flow
$m
Operating KPIs
Mobile voice
Voice revenue3
Customer base
Voice ARPU
Mobile data
Data revenue
Data customer base
Data ARPU
$m
million
$
$m
million
$
Constant
Reported
currency
currency
change %
change %
March 2021 March 2020
17.6%
11.9%
3,210
26.5%
1,372
19.5%
323 bps
42.7% 289 bps
10.0%
14.6%
307% 508.4%
37.0%
27.6%
(7.4%)
(7.4%)
57.9%
42.0%
3,592
1,639
45.6%
(654)
14
995
580
1,059
(595)
3
780
626
746
2,083
118.2
1.5
1,157
40.6
2.5
1,970
110.6
1.6
930
35.4
2.4
5.8%
6.9%
(4.6%)
24.3%
14.5%
2.5%
11.0%
0.1%
31.2%
8.2%
Availability, relevant and
affordable products, and
a quality network – these
core pillars have been
our focus. Our strong
performance is proof
of customer confidence
and trust in the brand,
and this is the equity
we continue to build on.
Ashish Malhotra
Chief sales and marketing officer
1 Mobile service underlying revenue after intersegment eliminations amounted to $3,587m in the year ended
31 March 2021 and $3,207m in the year ended 31 March 2020. It also excludes a one-time exceptional revenue
of $20m relating to a settlement in Niger in the year ended 31 March 2021
2 Operating profit includes a CSR (corporate social responsibility) expense of $3.5m in the year ended 31 March
2021 and $1m in the year ended 31 March 2020
3 Voice revenue represents underlying revenue excluding the impact of a settlement in Niger ($20m)
44
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: BusinessXreviews_v93
Modification Date: 25 May 2021 5:18 pm
Strategic report Our performance
Underlying revenue for mobile services grew by 11.9% in reported
currency and by 17.6% in constant currency, with both voice and data
revenue contributing to the growth.
Voice revenue increased 11.0% in constant currency, driven by
customer base growth of 6.9% driven by expansion of the distribution
network and network infrastructure. The slight slowdown in customer
base growth was due to new KYC regulations in Nigeria, excluding
Nigeria the customer base grew by 10.7%. Voice usage per customer
increased 16.4% to 234 minutes per customer, resulting in overall
minutes growth of 29.1%. Voice revenue in Q4’21 grew by 12.8% with
an improved performance across all regions.
Data revenue grew by 31.2% in constant currency, largely driven by an
increase in the data customer base and data usage growth. The data
customer base grew by 14.5%, driven by expansion of our 4G network
infrastructure, with 76.5% of sites now operating on 4G, compared
with 64.7% in the prior year, and increased smartphone penetration up
1 percentage points. The data customer base as a proportion of total
customers reached 34.3%, an increase of 2.3 percentage points. Total
data usage on our network grew by 74.8%, led by an increase in data
usage per customer and the growth of the data customer base. Data
usage per customer per month was 2.6 GB, up 44.2% year on year,
largely driven by our 4G network expansion and increasingly popular
data bundle offerings. Growing penetration on our 4G network helped
drive up data ARPU growth to 8.2%, with 4G data usage more than
doubling and contributing 62.2% to total data usage on the network in
Q4’21.
Data revenue contribution reached 29.8% of total Group revenue,
up from 27.2% in the prior year.
Our market
We’ve continued to grow in 2020/21 by offering transparent voice and
data products that meet customers’ needs – and by making sure that
customers can access them through a distribution network that
reaches them effectively and efficiently.
Demand in sub-Saharan Africa remains strong, as growing populations
of aspirational, price-conscious consumers look for ways to connect
with each other, with business, and with the opportunities of the global
economy. We’ve continued to add new customers for both voice and
data services, thereby growing our overall customer base by 6.9%,
to 118.2 million subscribers across our markets.
Demand for voice services continues to grow as mobile penetration
within the region increases. While we’ve seen changes in usage
patterns during the Covid-19 pandemic, with an impact on traffic and
revenues during hours when curfews were in place, this was mitigated
by our increased distribution: our overall ARPU grew by 7.7%
compared to 2019/20. Our mobile voice business line – which includes
pre- and post-paid wireless voice services, international roaming,
fixed-line phone services and interconnect revenue – contributed
53.6% to our consolidated revenue in 2020/21.
Data has been another area of strong performance. Our focus is on
simple and affordable data products that are transparent to customers,
including ‘more for more’ data bundles, to encourage data use. While
smartphone penetration across the continent increased less than
expected, partly because of smartphone supply issues caused by
Covid-19, it nonetheless increased by 1.0 percentage points in
2020/21 to 33%. We see the trend towards smartphone adoption
only going in one direction, and we’re continuing to invest in our 4G
network, reinforcing our position as leaders in 4G in most markets.
Altogether, we’ve seen strong growth in data customer numbers,
rapid expansion of data usage, and increased revenue.
Both voice and data performance improvements are only possible
because of our foundation in two key areas: network and distribution.
Upgrading and expanding our network builds our capacity and
resilience, so we can keep customers connected. We continue to focus
on making sure our Airtel shops, Airtel kiosks, and agents are as close
as possible to customers, increasing our exclusive retail footprint by
73% this year.
For more information on our response to Covid-19, see page 16
Transforming lives spotlight
Keeping students connected as they
learned from home in Gabon
Distance learning became the new normal for students in many
of our markets in the Covid-19 pandemic – and we worked with
a range of partners to help schools keep children’s education
on track.
In Gabon, we supported the Ministry of National Education by
enabling free access to education websites in the government’s
‘Learn from Home’ programme. And Airtel employees lent a hand
through our ‘1 employee, 1 school kit’ initiative, collecting school
supplies to support children at the El-Jireh orphanage in Essassa.
See our sustainability ambition on pages 50-53
Airtel Africa plc Annual Report and Accounts 2021
45
© 2021 Friend Studio Ltd
File name: BusinessXreviews_v93
Modification Date: 25 May 2021 5:18 pm
Business review: Airtel Money
Unlocking potential through
financial inclusion
Our model for
spearheading financial
inclusion is predicated on
customer-centricity and
solving the challenges
faced by millions on the
continent. From livelihood
creation to processing
payments to facilitating
credit and savings, our
purpose is to ensure
that the digital revolution
does not leave anyone
behind.
Vimal Kumar Ambat
CEO, Airtel Money
Revenue
Underlying EBITDA
Operating profit
ARPU
$401m
Reported currency 29.1%
Constant currency 35.5%
$195m
Reported currency 30.5%
Constant currency 36.2%
$185m
Reported currency 29.6%
Constant currency 35.3%
$1.7
Reported currency 1.6%
Constant currency 6.6%
Revenue ($m)
Underlying EBITDA ($m)
2020/21
2019/20
401
35.5%
311
37.2%
2020/21
2019/20
195
48.7%*
150
48.2%*
Growth % are in constant currency
* Underlying EBITDA margin
Summarised statement of operations
Unit of
measurement
$m
$m
%
Description
Revenue1
Underlying EBITDA
Underlying EBITDA margin
Depreciation and amortisation $m
$m
Operating profit
$m
Capex
$m
Operating free cash flow
Operating KPIs
Mobile money key KPIs
Transaction value
Active customers
Mobile money ARPU
$m
million
$
March 2021 March 2020
311
150
48.2%
(7)
143
12
138
401
195
48.7%
(10)
185
32
163
Reported
currency
change %
29.1%
30.5%
52 bps
48.2%
29.6%
Constant
currency
change %
35.5%
36.2%
27 bps
54.0%
35.3%
165.8% 165.8%
24.9%
18.7%
46,009
21.7
1.7
31,598
18.3
1.6
45.6%
18.5%
1.6%
53.6%
6.6%
1 Mobile money service revenue post inter-segment eliminations with mobile services was $301m in the year
ended 31 March 2021 and $220m in the year ended 31 March 2020
Our market
Digital financial services are transforming sub-Saharan Africa, where millions of people lack
access to traditional banking services but are unlocking the potential of digital commerce
through mobile phones.
Airtel Money is part of this transformation, which is driving financial inclusion at scale as well as
creating huge opportunities for business growth as customers adopt new and wider ways to
store, send, and spend their money.
Our digital mobile financial services platform caters to a large addressable market
characterised by limited access to formal financial institutions and a lack of banking
infrastructure. It includes mobile wallet deposit and withdrawals, merchant and commercial
payments, benefits transfers, loans and savings, virtual credit cards and international money
transfers. Our partnerships with Ecobank, Standard Chartered Bank, Mastercard, Western
Union, MoneyGram, WorldRemit, and Mukuru, and remittance aggregators like Homesend,
MFS Africa, Terrapay and Thunes, are broadening our offer, and helping us onboard more
customers.
46
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: BusinessXreviews_v93
Modification Date: 25 May 2021 5:18 pm
Strategic report of 27 basis points. The growth in total transaction value in constant
currency, of 53.6%, was driven by customer base growth of 18.5% and
growth in the transaction value per customer per month of 20.9%. The
Q4’21 annualised transaction value reached $51bn in constant
currency, with mobile money revenue accounting for 10.6% of total
revenue in the quarter.
The mobile money customer base reached 21.7 million, up 18.5% from
the prior year, with Airtel Money customers now representing 18.3% of
our total customer base, an increase of 1.8 percentage points. Mobile
money ARPU increased 6.6%, driven by the increase in transaction
values and a higher contribution from merchant payments, cash
transactions, P2P transfers and mobile services recharges through
Airtel Money.
Our mobile money strategy in action
Realising Airtel Money’s potential
through strategic investment
Two recent announcements in March and April 2021
demonstrate how we’re unlocking value by bringing in
strategic investors in our mobile money business.
The Rise Fund, the global impact investing platform of leading
alternative investment firm TPG, will invest $200m in Airtel
Mobile Commerce BV (AMC BV), a wholly-owned subsidiary
of Airtel Africa plc. Mastercard will invest $100m. We are in
discussions with other potential investors in relation to possible
further minority investments into Airtel Money, up to a total of
25% of the issued share capital of AMC BV.
AMC BV is currently the holding company for several of Airtel
Africa’s mobile money operations; and is now intended to own
and operate the mobile money businesses across all of Airtel
Africa’s 14 operating countries.
Airtel Africa and Mastercard have also signed a new
commercial framework which will deepen our partnerships in
areas including card issuance, payment gateway, payment
processing, merchant acceptance and remittance solutions,
amongst others.
Both transactions valued our mobile money business at
$2.65bn on a cash and debt-free basis. Airtel Africa continues
to hold the remaining majority stake.
The proceeds will be used to reduce our Group debt, and
invest in network and sales infrastructure in our markets.
We offer mobile money services directly to customers in 13 of our
14 markets. In Nigeria, Airtel Money services are offered by a licensed
bank using Airtel Nigeria network. We have applied for our own mobile
banking licence (see our Nigeria Business review on page 38).
Our customers benefit from Airtel Africa’s strong network presence
and our extensive distribution platform of kiosks, mini shops, and
dedicated Airtel Money branches, as well as our extensive agent
network. To drive sustainable long-term growth, we’re focused on
assured float availability, distribution expansion and increased use
cases for our customers.
In 2020/21, our network grew to 37,000+ kiosks, 10,000+ Airtel
Money branches and shops and more than 440,000+ Airtel Money
agents, creating valuable employment opportunities while building
greater convenience and accessibility for customers. These have been
important drivers of the 18.5% growth in our customer base.
We also aim to increase the penetration of our services by developing
the mobile money ecosystem and making Airtel Money easier to use.
We made our user interface simpler through our self-care app, we
continue to partner with other financial institutions to drive mobile
banking services, and we’re developing products to help drive the
growth and uptake of merchant payments, business to customer (bulk
payments) and customer to business payments. We’re also building
Application Programming Interfaces (APIs) to allow further integration
with other partners and technologies.
In 2020/21, we saw a significant shift in customer behaviour, including
a 53.6% increase in transaction volume, with notable increases in the
use of bank to wallet transfers, international money transfers, and
merchant or bill payments. This reflects a worldwide movement
towards the adoption of digital payments, and while this may have
been accelerated by the Covid-19 pandemic, we see it as indicative of
the long-term trend. We believe this behaviour change creates a
significant opportunity, which informs our approach to the strategic
monetisation of our mobile services, described below. At the same
time, in recognition of the hardships faced by many customers and
communities in dealing with the pandemic this year, we made a range
of Airtel Money services complimentary.
For more information on our response to Covid-19, see page 16
Widening financial inclusion
We’re addressing the lack of banking services in our markets through
services that include:
• Mobile banking
• Merchant payments
• Loans
• Savings
• International money transfers
• Insurance
• Virtual cards
Our performance
Mobile money revenue grew by 35.5% to $401m driven by 18.5%
growth of the customer base and transaction value growth of 53.6%.
Customer base growth was largely driven by expansion of our
distribution network, as we continued to invest in exclusive kiosks and
mobile money branches. Throughout the year, the expansion of our
mobile money product portfolio, through partnerships with leading
financial institutions, and the expansion of our merchant ecosystem
further strengthened our mobile money propositions.
Underlying EBITDA for mobile money grew by 30.5% to $195m in
reported currency. In constant currency, underlying EBITDA grew
by 36.2%. Underlying EBITDA margin was 48.7%, an improvement
© 2021 Friend Studio Ltd
File name: BusinessXreviews_v93
Modification Date: 25 May 2021 5:18 pm
Strategic report Airtel Business
Dynamic, reliable
communications for
the organisations
driving Africa’s
growth
The organisations we serve are
the growth engine of our markets
– and we are perfectly positioned
to draw on the infrastructure and
network leadership of Airtel Africa
to provide a complete suite of
services to our customers.
Luc Serviant
Group enterprise director
Airtel Business acts as the digital partner to
companies and organisations new and old,
large or small – supporting the enterprises
that are helping to drive economic growth
and opportunity across Africa.
Airtel Business offers a comprehensive suite of business ICT
(Information and Communication Technologies) and digital services
for organisations at any stage of their growth, providing mobile and
fixed data services to major corporate offices, non-governmental
organisations, government departments, diplomatic missions,
start-ups and small- and medium-sized businesses.
We serve customers who value speed, security and coverage – and we
understand that reliability is key for any organisation where disruptions
can lead to lost turnover, inefficiencies, and even safety incidents.
We also offer conferencing and collaboration services, a complete
end-to-end cloud and data centre, and mobile money services from
Airtel Money.
Ours is a growing market, as more and more businesses across
sub-Saharan Africa digitise and look for communication solutions.
In addition to mobile banking and e-commerce, e-health, e-education,
e-energy or e-agriculture are creating endless opportunities for African
entrepreneurs. By supporting their success, we believe we’re helping
them create value and unlock the possibilities of digitalisation in the
wider economy. It is also fuelling our growth: this year, we’ve seen a
significant growth in terms of enterprise customer connections, fixed
or mobile, from March 2020 to March 2021.
+24.3%
fixed data
connections
+34.5%
enterprise mobile
subscribers
48
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: BusinessXreviews_v93
Modification Date: 25 May 2021 5:18 pm
Strategic report Digital Labs
Shaping the digital
future through
technological
innovation and
delivery
Digital Labs is our in-house digital hub for developing
and delivering technology platforms and digital
products. We work with country teams across our
14 markets and we draw on Airtel Africa’s scale and
market leadership to innovate technologies that
enhance customers’ experience, drive financial
inclusion, and harness the power of digitalisation.
Innovation is vital when it comes to addressing customers’ digital
needs in sub-Saharan Africa. The challenges and opportunities
are unlike anywhere else in the world, and call for an agile, problem-
solving mindset supported by cutting-edge technological expertise.
Through Digital Labs, we can develop the right solutions for our
customers at speed, and shape the whole innovation process,
from concept to delivery to customer use. And our product
development focus is wide-ranging: we work on analytics, platforms,
digital consumer products, enterprise product engineering, and more.
This year alone we have worked on challenges as diverse as a mobile
device management solution and mobile app for retailers – that is
effectively a one-stop shop for managing their data and mobile money
needs – to developing contact tracing apps for governments as part of
their national effort to combat Covid-19.
The opportunities ahead of us, as our innovations help shape
customers’ digital future, are exciting.
We know that digitalisation will
be at the heart of a successful
future for our customers and
communities. Digital Labs is the
creative engine that propels Airtel
Africa’s contribution to that digital
future, solving complex problems
and innovating bold technologies
that meet customers’ digital needs.
Neelesh Singh
Chief information officer
© 2021 Friend Studio Ltd
File name: BusinessXreviews_v93
Modification Date: 25 May 2021 5:18 pm
Airtel Africa plc Annual Report and Accounts 2021
49
Strategic report Our sustainability ambition
Our sustainability
ambition: guiding
our business and
transforming lives
We’re doing more than plan a sustainability
strategy. We’re planning a more sustainable
future – for our business and for people
across sub-Saharan Africa.
50
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: OurXsustainabilityXstrategy_v42
Modification Date: 31 May 2021 11:28 am
Strategic report I am pleased that we are
establishing this strategy to
support communities across
Africa and to demonstrate our
environmental responsibility.
Raghunath Mandava
Chief executive officer
Letter from the CEO
Transforming lives means creating sustainable
futures for individuals, families, communities and
businesses across Africa. Sustainable futures that
are built on increasing equality through digital and
financial inclusion, through ensuring children have
access to vital education and through the provision
of rewarding employment for people across the
continent.
The development of our sustainability strategy is a significant and
vital step for Airtel Africa. It underpins our absolute commitment to
expanding the infrastructure and services that will tackle inequality
and drive economic growth. It establishes the role we can play in
helping the world address the climate crisis. And it demonstrates our
ongoing focus on introducing and upholding the highest governance
standards. I am determined that our sustainability strategy will be both
ambitious and credible to build the confidence and trust of all our
stakeholders.
The detailed sustainability plans we will be launching later in 2021 build
on a strong foundation of work we already have underway. In 2020
we established a partnership with UNICEF to support school children
with access to mobile technology throughout the Covid-19 pandemic,
ensuring they could continue their learning and stay in touch with
family and friends. And across every one of our 14 markets, local
initiatives are already transforming the lives of communities. While our
sustainability strategy will be defined at a Group level, national and
local programmes across Africa will continue to make an important
contribution.
I am pleased that we are establishing this strategy to support
communities across Africa and to demonstrate our environmental
and social responsibility. As the world starts to emerge from the
pandemic and economies struggle to recover, this has never been
more important to me or to the business. The goals we set and the
programmes we initiate will determine Airtel Africa’s future corporate
decisions – the investments we make, the partnerships we establish
and, critically, the culture of the company. In short, it is our future.
Raghunath Mandava
Chief executive officer
11 May 2021
Addressing the expectations of
stakeholders, fulfilling our purpose
Developing a transparent, ambitious
sustainability strategy is a vital next step
for Airtel Africa, strengthening our business
and helping us live our purpose of
transforming lives.
Our strategy will demonstrate to our
stakeholders that Airtel Africa is a
responsible corporate citizen, ready
to respond to any future regulatory
or legislative requirements around
sustainability. It will help to improve our
ESG rating, and will ensure we remain
competitive amongst global and African
peers. And above all, it will bring to life
our corporate purpose through clear
programmes to increase digital and
financial inclusion, address gender equality,
build the company into one of the best
employers in Africa, support communities
and minimise our environmental impact.
with NGOs. On pages 54-59, you will find
details of some of our key activities in
2020/21.
In this section, we provide an update on our
progress to date. We give an outline of the
outcome of our materiality assessment, and
the sustainability framework we have
developed to clarify our reporting and
ensure the business remains focused on
key areas. We also set out the six United
Nations Sustainable Development Goals
(SDGs) to which we believe we can make
the most significant contribution, and how
we will play our part.
While this will be our first sustainability
strategy, we have long worked to improve
the lives of Africans across all our 14
markets, with corporate social responsibility
(CSR) projects and through partnerships
Timeline for transformation
In 2020, we stated our intention to establish
a sustainability strategy by the end of 2021,
setting out long-term programmes and
investment to improve the lives of millions
of people in our markets. We are on track
to make a full announcement of our goals,
commitments and programmes in Q3
2022, and we are committed to reporting
annually on our progress. In 2022, we will
publish our first sustainability report, which
will comply with the Global Reporting
Initiative (GRI) and Task Force on Climate-
related Financial Disclosures frameworks
(TCFD).
© 2021 Friend Studio Ltd
File name: OurXsustainabilityXstrategy_v42
Modification Date: 31 May 2021 11:28 am
Airtel Africa plc Annual Report and Accounts 2021
51
Strategic report Our sustainability ambition continued
Setting out our sustainability strategy – progress to date
Our material topics
To determine the priority material topics that
our sustainability strategy must address, we
completed a detailed materiality assessment.
This included in-depth analysis of industry
benchmarks, best practice across the global
telecoms sector and the recommendations of
Global System for Mobile Communications
Association (GSMA).
We also reviewed the focus areas of ESG
ratings agencies and reporting frameworks.
This research and analysis identified 24
material sustainability topics – indicated on the
graph below as A-X. To determine their relative
importance, each of these topics was scored
twice: first, for its relevance or potential risk to
Airtel Africa, and then for its relevance to our
broad range of stakeholders. This scoring
allowed us to rank the topics and inform the
priority focus areas for our sustainability
strategy. Of the topics, 18 were ranked as
being of extremely high relevance (top right
quartile, or A to R) – and, therefore, priority
topics to both our business and our
stakeholders. We are now working to establish
long-term goals and build programmes to
address these priority material topics as part
of our sustainability strategy.
Materiality matrix
S
R
E
D
L
O
H
E
K
A
T
S
R
U
O
O
T
E
C
N
A
V
E
L
E
R
h
g
H
i
w
o
L
Key
W
X
Low
A
B
C
D
E
F
G
H
I
J
K
L
M
N
Q
OP
R
S
T
V
U
A Data security
B Ethical business practices
C Anti-bribery and corruption
D Digital inclusion
E Financial inclusion
F Education and digital literacy
G Economic value creation
H Labour management
I Employee health and safety
J Service quality
K Transparency and reporting
L Supply chain
M Indirect socio-economic
benefits
N Anti-competitive behaviour
O Diversity and inclusion
P Engagement with local
communities
Q Climate change
R Circular economy
High
S Technological innovation
T Customer health and safety
R E L E V A N C E T O A I R T E L A F R I C A
High priority material topics
Material topics
U Marketing and labelling
V Security practices
W Environmental resources
X Biodiversity
Our sustainability strategy framework
We have now developed a framework for our sustainability strategy. With 24 material topics – 18 of which are priorities for our sustainability
strategy – this framework will ensure clarity in our reporting and ongoing focus within the business. The framework has four pillars –
Our business, Our people, Our communities and Our environment – reflecting the broad range of material topics. We are now focused
on the development of long-term sustainability programmes and commitments for each of these four pillars. The diagram below explains
why these pillars are important to our sustainability and the topics we will be addressing under each of them.
Our business
Our people
Our community
Our environment
Our role
The expansion of our network
and the reliability of our service is
critical to increasing digital and
financial inclusion across Africa.
Through investment in our
operations and services we can
contribute to the economic
growth of families, businesses
and nations.
Tackling inequalities starts
within our own business.
Providing rewarding employment
opportunities to people across all
our markets and demonstrating
our genuine commitment to
achieving full diversity and
inclusion among our workforce is
central to our culture and a key
focus for our future.
We have an important role
to play in improving financial
inclusion and access to
education and healthcare
for people and communities
across Africa. Our network and
services are key, but so are the
partnerships and more direct
forms of investment and support
we can provide.
Recognising the potential impact
of the climate crisis on Africa, we
acknowledge the responsibility
Airtel Africa has to limit its
environmental impact. We are
committed to addressing all the
environmental risks that arise
from our operations and the
delivery of our services.
SDGs to which we will be contributing
Our priority material topics
• Data security
• Ethical business practices
• Anti-bribery and corruption
• Financial inclusion
• Economic value creation
• Service quality
• Transparency and reporting
• Supply chain
• Anti-competitive behaviour
• Labour management
• Employee health and safety
• Diversity and inclusion
• Digital inclusion
• Education and digital literacy
• Indirect socio-economic
• Climate change
• Circular economy
benefits
• Engagement with local
communities
52
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: OurXsustainabilityXstrategy_v42
Modification Date: 31 May 2021 11:28 am
Strategic report
Supporting the United Nations
Sustainable Development Goals
(UN SDGs)
In 2015, the United Nations launched the Sustainable Development
Goals (SDGs), uniting governments, businesses and civil society across
the world in the development of solutions to the most intractable
problems facing the planet and its people. The 17 SDGs are broad in
their nature and ambitious in their scope. Each is defined by several
specific targets that indicate how the SDGs can be measured and
achieved.
As a business, we are fully supportive of all 17 SDGs and look to make
a contribution to all of them whenever possible. However, we have
identified six SDGs where we believe our sustainability strategy
programmes will make the most meaningful and measurable
contribution. When we launch our full sustainability strategy in Q3
2022, we will identify the specific targets we will work towards within
each of these SDGs.
Developing our strategic goals
and roadmaps
Our work to date has identified our material topics, established
a strategic framework to deliver our ambitious sustainability objectives
and defined the contribution we can make to the achievement of the
SDGs. We are now focused on setting the goals that will ensure we
deliver measurable improvements, and we will publish them in
Q3 2022.
We know that our stakeholders and customers will follow our progress
and hold us to account on the promises we make. We know that we
need to define the programmes required over the short, medium and
long term to achieve our objectives. Work is underway across the
entire business to plan the investment, to identify new technologies
and services, and to establish the policies and processes that will
ensure our strategy is achievable by the business and credible to our
stakeholders. We recognise that collaboration will be essential, and we
are identifying the partnerships we can create with industry peers,
NGOs, academics and civil society organisations to deliver our goals
and advocate on behalf of the people in our markets.
We look forward to making our measurable goals public and providing
details of the roadmaps and milestones we have set ourselves to
deliver those goals.
Overseeing our progress
During the year we established an internal reporting structure to
support our sustainability strategy development. The Board of
directors has overall responsibility for our sustainability strategy and its
implementation across the Group. Our Board Sustainability champion
is Annika Poutiainen. The executive sponsor is our CEO, Raghunath
Mandava. We established a sustainability monitoring group to oversee
and report to the Board on progress of our sustainability strategy
development, including environmental initiatives.
SDG
How we make an impact
SDG4: Quality education Through the provision of
free internet services to schools and libraries across all
our markets, we will ensure teachers and children have
access to the resources they need to improve literacy
standards and educational attainment. And by direct
financial support for a number of schools in each of our
14 markets, we are able to ensure education is
established and remains available to some of the most
vulnerable children.
SDG5: Gender equality We are committed to
improving gender equality across Africa. Through our
work to expand our network, more women will have
access to services needed to drive financial inclusion,
providing them with greater independence, security for
their families and the opportunity to develop
businesses. And within Airtel Africa, our commitment to
achieving full diversity and inclusion at every level of the
business will ensure that all employees, regardless of
gender, have the chance to develop their skills and
progress their careers.
SDG8: Decent work and economic growth We will
help ensure people across all our markets have access
to the financial and data services they need to establish
independent businesses, driving the entrepreneurship,
creativity and innovation that is essential for economic
growth. And through our own recruitment, we will
continue to develop opportunities for local people to
enjoy safe and rewarding employment and
development opportunities.
SDG9: Industry, innovation & infrastructure
Through the ongoing expansion of our network and
continuous development of our data security and
service reliability, we will establish essential
infrastructure to increase financial inclusion for
individuals, provide vital education and healthcare
services and support the economic resilience and
growth of communities.
SDG10: Reduced inequalities Our commitment to the
ongoing development of our services and network will
provide millions of people with new opportunities
regardless of their age, gender, disability, ethnicity,
religion or any other status. This will be reflected in our
own business through our recruitment policies and our
focus on achieving full diversity and inclusion.
SDG12: Responsible consumption & production
Our sustainability strategy will ensure that we minimise
every environmental impact arising from our operations.
It will drive the development of new technologies to
reduce our energy use and limit our direct and indirect
greenhouse gas emissions, and it will lead to innovative
processes that effectively minimise our waste.
The telecoms sector has a unique opportunity to help build a
better future and support the vision of the UN SDGs. We must
harness our expertise in digitalisation and financial inclusion
to the work of creating a world where ‘no-one is left behind’.
Annika Poutiainen
Board director and Airtel’s sustainability champion
Airtel Africa plc Annual Report and Accounts 2021
53
© 2021 Friend Studio Ltd
File name: OurXsustainabilityXstrategy_v42
Modification Date: 31 May 2021 11:28 am
Strategic report Corporate responsibility
Our work with
communities
Supporting the communities in which we work
is part of what makes us who we are as a business,
and as Airtel Africa employees.
Right across Africa, we have always been engaged in corporate social
responsibility (CSR) projects and activities that make a real difference
to the lives of some of the most vulnerable and underserved people on
the continent. Many of these projects have been running for years and
their themes will underpin some of the pillars of our new sustainability
ambition (see pages 50-53).
This year, the impact of the pandemic meant that our community
projects were more vital than ever, helping to provide people with
essential items and services. Our Group-wide approach to key
community activities focuses on three main areas: education,
health and wellbeing, and disaster relief.
Across our markets, employees volunteer and offer support in a wide
range of community programmes, from supporting girls in Niger
through professional training in hairdressing and aesthetics, donating
food and essential materials to families in Chad, to the significant and
ongoing donation of medical equipment across all our markets to
protect frontline workers in the fight against Covid-19.
For more information on our values, see page 22
Bridging the health information gap
Mobile and data technology is playing an important role in helping
people get trustworthy information about their health. One example
is our support for the Uganda Blood Transfusion Service, which
struggled to reach its donors due to the Covid-19 pandemic. We
supplied them with two hotline numbers free of charge, and a large
number of minutes and data for them to reach potential blood donors.
This enabled many people to continue donating blood at donation
centres across Uganda.
In Nigeria, in a partnership with the Nigeria Centre for Disease, the 36
State Government and Federal Capital Territory, we donated mobile
phones, toll-free minutes, internet and data to provide a Covid-19
helpline to customers in need of medical attention.
For more information on our response to Covid-19, see page 16
Supporting, improving and creating
opportunities in the lives of the
communities we serve through
harnessing the power of mobile
technology is at the core of our
objectives and values.
Michael Okwiri
Head of communications and CSR
Engaging with our stakeholders
Understanding the needs and expectations of all our
stakeholders helps us boost our positive impact – and makes us
a better business.
We describe how we engage with our stakeholders on page 32.
A simple set of principles guides all of our corporate social
responsibility (CSR) programmes. We work with initiatives that:
Do:
• Draw on our own technology
• Align with local development plans or goals
• Address a pressing social need
• Offer opportunities to create partnerships with customers,
employees, and public and private sector actors
Do not:
• Harm the environment
• Discriminate because of race or gender
• Support a political party, candidate or movement
• Support a particular religious doctrine
133m
school age children in
sub-Saharan Africa had
access to remote learning
Our community in action
Supporting education for
133 million students across Africa
Africa will experience significant growth in its child and
youth populations over the coming decades. We are
determined to support them to give them the best
possible start.
In May 2020, we formalised a partnership with UNICEF to
provide an estimated 133 million school age children in
sub-Saharan Africa with access to remote learning through
the provision of mobile technology. The partnership also
supported UNICEF, facilitating vital cash assistance to alleviate
financial barriers for some of the most vulnerable families
across the region, including many affected by economic
hardship during Covid-19.
The partnership led to us zero-rating 20+ websites hosting
educational content across 11 of our markets, which provided
children with remote access at no cost.
© 2021 Friend Studio Ltd
File name: CorporateXresponsibility_v66
Modification Date: 25 May 2021 5:28 pm
Strategic report Our community in action
Harnessing mobile technology to
support education in Kenya
Harnessing the strength of our technology to drive change
in the community is central to our ‘Transforming lives’
commitment. In line with this, in 2020 we accelerated the
flagship community programme we operate in Kenya to
provide free internet connectivity for students in the
country. For even more schools, we are now responsible for
students having access to free data through the provision
of free data devices.
The internet opens educational opportunities for children
providing them with access to the wide range of online and
e-learning facilities available, helping to ensure they are
well-prepared for further education and future employment.
So far, we have connected over 300 schools in 30 counties
in Kenya, positively impacting the lives and opportunities
of more than 300,000 students in the process.
Our community in action
Making connections,
listening to communities
in Nigeria
Our services are making a difference to the lives of millions
of Nigerians – but we know that every community is different
and has different needs. So alongside our expansion of data
and voice services into regions where there is huge unmet
demand from individuals and businesses, we also listen to
our community stakeholders.
To take one example, this year our Touching Lives community
initiative was contacted by representatives from the Isokan
community in Ogun State, which had been left without electricity
for more than a decade. Through a N7,000,000 (equivalent to
$18,500) donation by Touching Lives, Airtel Nigeria helped
construct a pole and cable network to link them to the public
power grid.
300
schools in 30 counties
in Kenya, have been
connected
Our community in action
#SoyonsPrudents
(‘#LetsBeCareful’):
raising cancer awareness
in Gabon
Awareness campaigns are a crucial tool in combating breast
and cervical cancer – and in Gabon, our employees have joined
the movement to encourage women to get tested early.
As well as taking part in the Gabon Ministry of Health’s (Ministère
de la Santé) mobilisation campaign in October through the
#SoyonsPrudents social media campaign, our employees were
invited to take part in a free screening session in our offices by
the Education Unit of the Sylvia Bongo Ondimba Foundation.
Airtel Africa plc Annual Report and Accounts 2021
55
© 2021 Friend Studio Ltd
File name: CorporateXresponsibility_v66
Modification Date: 25 May 2021 5:28 pm
Corporate responsibility continued
Responsible business
Integrity, transparency and respect for human rights
underpin everything we do. Our Code of Conduct
sets out how we do business, and what we expect
from both ourselves and the people we work with.
Not only are we committed to respecting and upholding human rights
in our operations, but also to making sure our employees and business
partners respect the rights of the people we interact and work with.
From our Code of Conduct
We will conduct our business in a way which respects human rights.
We are committed to combatting any form of slavery, trafficking, child
labour, forced labour, inhuman treatment or working conditions that
are a threat to life or hinder the physical, emotional and/or mental
wellbeing of a person.
$362,000
$6.1m
total CSR expense
in 2020/21
We always consider whether a prospective partner’s values align with
our own when making contracting and supplier decisions. For more
information on our governance processes, including our zero tolerance
of bribery and corruption, see page 121 of the governance report.
donated by our employees to support
communities and matched by the company
like-for-like, all in support of various
government Covid-19 response efforts
52,900
times our e-learning
app has been
downloaded
Our community in action
Promoting vocational
skills in Tanzania
The Vocational Education and Training Authority (VETA) in
Tanzania has a vision to provide systems that will support
national socio-economic development for its people.
We have worked with VETA for many years with a key focus
on providing young adults with the important vocational skills
that will improve their employment opportunities. In 2016,
the partnership launched a new app, driven by demand for
an e-learning platform to deliver vocational skills.
Named VSOMO, the app was the first of its kind in East and
Central Africa and is accessible via smartphones and tablets.
In 2020, the programme accelerated and now supports both
Swahili and English languages and offers 13 courses. The results
demonstrate the positive impact that e-learning can have for
users: the app has been downloaded over 52,900 times, and more
than 18,311 individuals have registered.
To date, 831 students have been trained and a total of 628 have
received certification. We continue, with VETA, to find new ways of
providing young people with the skills necessary for employment.
Our community in action
Partnering with UN Women
to tackle domestic
violence in Malawi
In Malawi, domestic violence against women and girls
increased during the Covid-19 pandemic as families
endured lockdown restrictions.
We worked with UN Women to support women who are
experiencing domestic violence by offering a toll-free hotline.
The initiative aimed to reach four million women and
adolescent girls in Malawi with information on life-saving
services to help mitigate the impact of domestic violence.
The service also enabled volunteers to give more information
on keeping families safe and took many calls from pregnant
women seeking help on how to prevent Covid-19.
© 2021 Friend Studio Ltd
File name: CorporateXresponsibility_v66
Modification Date: 25 May 2021 5:28 pm
Strategic report Care for our people
Our colleagues are an essential part of our business.
We strive to be an employer of choice with a dynamic
working environment that encourages productivity
and fosters the health, knowledge, skills, experience,
drive and inventiveness of our colleagues.
We have three main focus areas for our people: making sure our
workplaces are fair through a robust human resources and policy
framework, improving our diversity and inclusion, and ensuring the
health and safety of our people.
A diverse and inclusive workplace
From our diversity and inclusion policy
Championing diversity and inclusion is embedded in our values.
We recognise that a diverse and inclusive workforce is key to
delivering our value proposition to customers.
We want to create an environment that embraces our differences
and fosters inclusion, so that people can maximise their potential.
We’re committed to supporting the development of women in
management and leadership roles and in the broader business,
and we will continue to develop our measurement and reporting
in this area in the coming year.
A fair workplace
From our Code of Conduct
We are an equal opportunity employer and are committed to creating
a safe and conducive work environment that enables employees to
work without fear of prejudice, gender bias and/or sexual harassment.
Our Code of Conduct, available on our website, outlines the framework
of robust policies we have in place to make sure we respect human
rights throughout our operations. This is supported by our
commitment to support people who speak out and ensure they have
no reason to worry about retaliation. We have an independent
whistleblowing mechanism in place which is managed by KPMG,
described in our Audit and Risk Committee report on page 107.
From our Code of Conduct
Our Code of Conduct provides that we do not discriminate
on any basis, including ethnicity, gender, language, age, race,
sexual orientation, religion, socio-economic status, or any other
arbitrary ground.
How we monitor our progress
Country management teams receive monthly briefings on our
diversity and inclusion initiatives, and they report to our Group
Executive Committee and HR Committee each quarter. Through
a monthly people scorecard, we are able to measure our
progress on diversity and inclusion. This scorecard is populated
by each country we operate in and informs us on the sections we
need to give particular focus, and in which specific countries.
Get the best people for every role, then provide them with an
environment that nurtures their thinking, is conducive to their
growth and allows them to deliver their best every day. This will
help you win even during unprecedented times.
Rogany Ramiah
Chief human resources officer
Our people in action
Employee assistance programme
The health and wellbeing of our employees is a priority for the
Group and with the increase in remote working, we are very
conscious of mental health.
At no point has this been more important than during the
pandemic, when country lockdowns have meant many of our staff
have been working in isolation which, we recognise, can have a
detrimental effect on emotional and mental wellbeing.
We launched an employee assistance programme across all our
markets which allowed for any employee to speak confidentially to
healthcare professionals. The programme was launched with the
aim of helping employees achieve mental wellbeing by having
harmony between work and personal life, which can often be
blurred. In addition, the programme enabled employees struggling
with their mental health to speak to someone for support and
information on how to help them.
Airtel Africa plc Annual Report and Accounts 2021
57
© 2021 Friend Studio Ltd
File name: CorporateXresponsibility_v66
Modification Date: 25 May 2021 5:28 pm
Strategic report Corporate responsibility continued
Environment, Health
and Safety (EHS)
We are committed to conducting business in a
responsible manner that will not intentionally harm
the environment, and we have policies and processes
in place to safeguard our employees.
Respecting the environment
We understand the importance of the natural environments we work
in – to our communities and to the world. As well as ensuring we
comply with all legal and local environmental requirements, we aim
to promote good environmental practices and reduce the impact
of our business on the natural world.
We have three broad areas of focus: responsible use of energy and
resources, reducing waste, and supporting biodiversity.
Responsible use of energy
Our offices, tower infrastructure and data centres all depend on
energy to operate.
We take a responsible approach to our use of energy. We recognise
that every company must contribute if the world is to address the
climate crisis. We are committed to using energy from renewable
sources whenever this is available and reliable enough to support our
network. The continued modernisation of our infrastructure is
contributing to more energy efficiency across the Group.
We have been converting many of our infrastructure sites from indoor
to outdoor, requiring less cooling and therefore fewer air conditioners.
We continue to connect sites to grid power and reduce dependencies
on diesel generated power. We carry out regular maintenance to avoid
excessive emissions. We use hybrid power solutions to reduce on
generator runtime.
In the UK, our energy consumption is just over 21,000kWh, which
is below the threshold for energy and greenhouse gas emissions
disclosure. We will report further on our progress as part of our
sustainability reporting.
Reducing waste
Reducing the amount of plastic and other waste in our business is an
important part of our sustainability ambition. Disposable plastic bottles
are no longer available in our offices, while the use of e-billing and
e-recharge systems is helping us to use and dispose of less paper.
Hazardous materials
In most of our markets we rely on towers that are owned and operated
by reputable tower companies. Where we do own towers, tower areas
are secured through fencing and regular maintenance is done to
ensure that there are no leakages.
Lead acid is disposed of according to regulatory standards, and third
parties have to be licensed and authorised to dispose of these
materials. In addition:
• There is a process for fuel delivery and battery lifecycle
management at all sites.
• All our fuel tanks are placed in secured sites with PVC and gravel
underneath; this is covered under our maintenance standards.
• All our electronic equipment is purchased from reputable third-party
organisations, who comply with the EHS standards.
• We continuously evaluate options of renewable power sources, such
as solar. In most of the operating countries, we lease towers from the
reputable towercos who are also committed to this objective.
58
Airtel Africa plc Annual Report and Accounts 2021
Supporting biodiversity
We draw on our technology and expertise in our markets to support
local biodiversity programmes such as the Wildlife Conservation
Society project in Nigeria and the reforestation initiative launched
by the government in Madagascar.
While Airtel Africa does not operate in a sector known for heavy
emissions or substantial environmental impact, we do consider
climate change as part of our overall business sustainability.
We fully support the 2015 Paris Agreement to limit global
temperature rises below 1.5°C, and the Global System for Mobile
Communications (GSMA) task force defining the emission
reduction pathway for the telecoms industry. Furthermore, we
welcome the call for action by the global investment community
for an imminent response on transitioning to net zero emissions
by 2050. As such:
• We’re focused on reducing our direct carbon emissions as a
business by looking at ways to optimise our own energy
efficiency at our sites and offices
• We’re increasing our own consumption of renewable energies
and shifting our energy suppliers where feasible in order to
reduce our own reliance on fossil fuels
• We will be announcing carbon reduction targets in Q3 2022
as a critical part of our sustainability strategy and will produce
and publish detailed transition plans with regular updates on
monitoring our progress
• We’re always looking for ways to contribute to the circular
economy by setting up e-waste recycling points
• We recognise the importance of addressing climate change
and are committed to adopting the recommendations of the
Task Force on Climate-Related Financial Disclosures (TCFD)
starting from 2022.
See page 78 for climate change as one of our emerging risks
Occupational health and safety
We know that a safe and healthy working environment helps people to
be more productive – and we aim to ensure the health and safety of all
our employees and business associates at all our office locations and
facilities. All our sites comply with engineering standards and we
scrutinise the health and safety procedures and policies of our
partners.
Our health and safety policy is part of our Code of Conduct and applies
to all of our employees, as well as contractors and partners on Airtel
Africa premises. We have training programmes in place for employees,
including during induction, to raise awareness of how to stay healthy
and safe at work.
How we monitor health and safety
We monitor health and safety through the health and safety
committee who produce a quarterly report. This report is
reviewed by the managing director at OpCo level and, in addition
to this, any major health and safety threats and incidents are
reported immediately to the CHRO and Group CEO. We also
work with our insurance providers to keep track of any disease
trends across OpCos. This enables us to provide preventative
advice/care to staff through health talks.
We provide medical insurance to all our full-time permanent
employees, and our health insurance partners hold a health screening
and wellness day each year.
Each of our country operations has detailed procedures in case of
emergencies.
© 2021 Friend Studio Ltd
File name: CorporateXresponsibility_v66
Modification Date: 25 May 2021 5:28 pm
Strategic report Our environment in action
Network support
in Nigeria
The Wildlife Conservation Society is a non-profit project that
manages the Yankari Game Reserve in Nigeria and safeguards
its endangered species.
As a non-profit, the project could not afford to rebuild their own
masts to support the VHF radios for communication within
the reserve, vital for the protection of animals and to support
ranger patrols.
In partnership with The Wildlife Conservation Society we intend
to host masts for the reserve which will enable rangers to
communicate through their VHF radios, helping them better
safeguard Nigeria’s endangered wildlife, particularly lions
and elephants.
+300
estimated number of
elephants in Yankari
Game Reserve (in 2005)
Non-financial information statement
We are pleased to set out below where you can find information relating to non-financial matters in our strategic report, as required under
sections 414CA and 414CB of the Companies Act 2006.
Business model
Environmental
matters
Our people
Social matters
Respect for human
rights
Anti-corruption and
anti-bribery matters,
health and safety
Strategic report
Business model and KPIs
Principal risks and uncertainties
Our 2020/21 Sustainability statement
Principal risks and uncertainties: compliance to legal requirements, KYC and quality of service,
non-compliance, internal controls and compliance
Principal risks and uncertainties: leadership succession planning, internal controls and
compliance
Chair’s statement; company purpose and values
Directors’ report
Stakeholder engagement: Our people
Principal risks and uncertainties: Covid-19
Directors’ report
Information about our approach to tax can be found on our website: airtel.africa.com
Principal risks and uncertainties: supply chain
Our Code of Conduct can be found on our website: airtel.africa.com
Directors’ report, modern slavery act, anti-corruption and anti-bribery matters
Our Code of Conduct and other related policies can be found on our website: airtel.africa.com
Page
1-80
22; 14
74
50
76-77
76
8; 22
119-122
32
74
119-122
72-77
94; 121
© 2021 Friend Studio Ltd
File name: CorporateXresponsibility_v66
Modification Date: 25 May 2021 5:28 pm
Airtel Africa plc Annual Report and Accounts 2021
59
Chief financial officer’s introduction
to the financial review
Profit and loss snapshot
We deliver value to
all our stakeholders
because we focus
on the fundamentals:
strengthening our
balance sheet, driving
robust top-line growth,
improved margins, and
better profitability
Jaideep Paul
Chief financial officer
Unit of
measure
%
$m
Description
Underlying revenue1 $m
$m
Voice revenue
Data revenue
$m
Airtel Money revenue2 $m
$m
Other revenue
$m
Expenses
Underlying EBITDA3
$m
Underlying EBITDA
margin
Depreciation and
amortisation4
Operating exceptional
items5
Operating profit6
Net finance costs
Non-operating
$m
exceptional items
$m
Profit before tax
$m
Tax
Tax – exceptional items $m
Total tax charge7
$m
Profit after tax8
$m
Non-controlling interest $m
Profit attributable to
owners of the company
– pre-exceptional items $m
Profit attributable to
owners company the
company
$m
$m
$m
$m
March
2021
3,888
2,083
1,157
401
347
(2,107)
1,792
Year ended
March
2020
3,422
1,970
930
311
302
(1,924)
1,515
Reported
currency
change %
13.6%
5.8%
24.3%
29.1%
14.9%
9.5%
18.3%
Constant
currency
change %
19.4%
11.0%
31.2%
35.5%
20.0%
14.5%
25.2%
46.1%
44.3%
181 bps
210 bps
(681)
(605)
12.5%
17.2%
(399.8%)
32.8%
14
1,119
(423)
–
697
(318)
36
(282)
415
(76)
(4)
901
(372)
69
598
(237)
47
(190)
408
(38)
(479.9%)
24.2%
13.5%
(100.0%)
16.7%
34.0%
(24.3%)
48.5%
1.8%
100.8%
308
261
18.0%
339
370
(8.4%)
Underlying revenue
$3,888m
Reported currency +13.6%
Constant currency +19.4%
Underlying EBITDA
$1,792m
Reported currency +18.3%
Constant currency +25.2%
Operating profit
$1,119m
Reported currency +24.2%
Constant currency +32.8%
Capex
$614m
% change (4.3%)
Basic earnings per share
9.0 cents
% change (12.6%)
All financial numbers are in reported currency
1 Underlying revenue includes intra-segment eliminations of $100m for the year ended 31 March 2021 and
$91m for the prior period. And it excludes one-time exceptional revenue of $20m relating to a settlement in
Niger in year ended 31 March 2021
2 Mobile money revenue post intra-segment eliminations with mobile services was $301m for the year ended
31 March 2021 and $220m for the prior period
3 Underlying EBITDA includes other income of $11m for the year ended 31 March 2021 and $17m for the prior
period
4 Depreciation and amortisation increase of $76m is mainly due to investment in capex and additional spectrum
in Nigeria
5 Operating exceptional items in the year ended 31 March 2021 includes exceptional revenue on account of
a one-time settlement in Niger amounting to $20m
6 Operating profit includes $6m CSR (corporate social responsibility) expense in the year ended 31 March 2021
and $5m in the prior period
7 Tax charges increased more than the PBT growth mainly due to a forex loss in non-DTA operating and HoldCo
entities of $42m in the year ended 31 March 2021 as compared to a gain of $21m in the previous year
8 Profit after tax for the year ended 31 March 2021 was largely flat compared with the previous year due to: (i)
higher exceptional benefits of $51m in the prior year (excluding tax exceptional item), (ii) other finance costs in
the prior year included a derivative gain of $47m, and (iii) higher tax in the year ended 31 March 2021 due to
increased profits
Strengthening our balance sheet and
seizing growth opportunities
Our results this year demonstrate the resilience of our business and the effective execution
of our strategy, delivering strong revenue growth and an expansion of our underlying EBITDA
margin. They show that even in the uncertain times caused by Covid-19, we are capturing
growth opportunities in a fast-growing region that remains vastly underpenetrated in terms
of both mobile and banking services – opportunities that simultaneously further our ambitions
to bridge digital divides and drive financial inclusion.
60
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: FinancialXreview_v79
Modification Date: 26 May 2021 8:20 am
Strategic report
From a financial perspective, we focused on four main objectives
this year.
1. Growing our operating profitability
Our first objective was to continue supporting the business to enhance
operating profitability through higher revenue extraction and EBITDA
flowthrough by focusing on operating cost. As the review below
describes in detail, operating profit grew by 24.2% in reported
currency, with constant currency growth of 32.8%, constant currency
growth was partially offset by currency devaluation.
2. Improving our return on capital
Our second objective was to improve our return on capital by making
sure our capex was deployed adroitly. This is one of the key measures
we track, so that we can monitor how assets are performing while
taking long-term financing into consideration. Our return on capital
employed was 16.5%, an improvement of 2.5 percentage points.
3. Strengthening our balance sheet and improving
leverage
Third, we sought to strengthen our balance sheet through a
continuous focus on deleveraging our debt position as a result of
EBITDA expansion, asset monetisation and strategic investment
opportunities.
Our leverage (net debt to underlying EBITDA) improved to 2.0x (2.1x
as of 31 March 2020) despite investing $247m of intangible capex
to renew licences in two of our largest markets, Nigeria and Uganda,
and acquiring additional spectrum across a few of our markets. This
is a longstanding focus for the business, and our aim is to reduce our
leverage ratio further and keep it below 2.0x, which is the anchor of
our capital structure policy.
The investments by The Rise Fund of $200m, and $100m by
Mastercard, in Airtel Mobile Commerce BV, described on page 47,
demonstrate our strategy to bring fresh investments into our mobile
money business. We have announced our intention to explore the
potential listing of our mobile money business within four years.
We also entered into an agreement to sell our telecommunications
tower companies in Madagascar and Malawi, and into exclusive
Memorandum of Understanding agreements for the potential sale
of our tower assets in Chad and Gabon.
As part of our strategy to achieve effective natural hedging in our
balance sheet, we have reduced the foreign currency exposure by
increasing the local currency market debt to 14%, from 10% of total
market debt in previous period.
As set out in Note 2.2 to the financial statements on page 154, as of
the date of authorisation of the financial statements, the Group had
undrawn committed facilities of more than $1.1bn. This strengthens
our liquidity position for sustainable business growth and repayment of
market debt as and when falling due.
A challenge that we have faced over the last 12 months has been low
availability of foreign currency in Nigeria and, as a consequence, being
unable to fully benefit at Group level from the strong cash generation
of our local business. However, during the year this had no material
impact on our liquidity at Group level as we continue to access liquidity
broadly across the rest of our footprint. This challenge is still on going
and we continue to closely monitor the situation.
See how we manage our risks, on pages 72-78
4. Returns to shareholders
Our fourth objective was to enhance returns to shareholders over the
medium- to longer-term horizon.
During the year, the Board approved a new progressive dividend policy,
which aims to grow the dividend annually by a mid- to high- single-digit
percentage from a base of 4 cents per share for financial year
2020/21, until reported leverage falls below 2.0x. We paid an interim
Performance highlights
• Reported revenue grew by 14.2% to $3,908m, with Q4’21
reported revenue growth of 15.4%.
• Constant currency underlying revenue growth was 19.4%,
with Q4’21 growth of 21.7%. Growth was recorded across
all regions: Nigeria up 21.9%, East Africa up 23.5% and
Francophone Africa up 10%; and across key services, with
revenues for voice up 11.0%, data up 31.2% and mobile
money up 35.5%.
• Underlying EBITDA was $1,792m, up 18.3% in reported
currency, and growing 25.2% in constant currency.
• Underlying EBITDA margin was 46.1%, adding 181 basis
points (210 basis points higher in constant currency).
Underlying EBITDA margin for Q4’21 was 47.7%, an increase
of 389 basis points in constant currency.
• Operating profit increased 24.2% to $1,119m in reported
currency, and by 32.8% in constant currency.
• Free cash flow was $647m, up 42.8% on the prior year.
• Basic EPS was 9.0 cents, down 12.6%, largely due to prior
year exceptional items and a one-off derivative gain.
Excluding these, basic restated EPS rose 44.5%. EPS before
exceptional items was 8.2 cents.
• Our customer base grew by 6.9% to 118.2 million, with
increased penetration across mobile data (customer base
up 14.5%) and mobile money services (customer base up
18.5%). The recent slowdown in customer base growth has
been due to the new SIM registration regulations in Nigeria
• The Board has recommended a final dividend of 2.5 cents
per share, making the total dividend for FY21 4 cents
per share
dividend of 1.5 cents per ordinary share in December 2020. The Board
recommended a final dividend of 2.5 cents per share.
Basic earnings per share reduced from 10.3 cents to 9.0 cents in
financial year 2020/21. However, normalising the one-time gain of
exceptional items, restated earnings per share improved from 6.9
cents to 8.2 cents.
Outlook: helping customers and
communities bounce back
The fundamentals of our business remain strong, and we are well-
positioned to help our customers and communities as economies in
our region begin their projected return to GDP growth. We will continue
to look at further strategic investment and asset monetisation
opportunities, and to further rebalance our foreign and local currency
exposure to achieve a more effective natural hedging of our balance
sheet, so that we can continue to be a strong, high-performing
business at the heart of sub-Saharan Africa’s digital future.
Jaideep Paul
Chief financial officer
11 May 2021
© 2021 Friend Studio Ltd
File name: FinancialXreview_v79
Modification Date: 26 May 2021 8:20 am
Airtel Africa plc Annual Report and Accounts 2021
61
Strategic report Financial review
Summary
These results continue to demonstrate the effective execution of our strategy, delivering
strong revenue growth and the significant expansion of our underlying EBITDA margin. As
a result, we were able to deliver double-digit underlying revenue growth of 17.6% in mobile
services in constant currency (11.9% in reported currency) and 35.5% revenue growth in
mobile money services (29.1% in reported currency).
Basic EPS was 9.0 cents, lower than the 10.3 cents from the prior year, largely a result of
the lower number of average shares in the previous period (EPS impact of 0.5 cents), an
increase in tax charges due to higher operating profits and withholding tax on dividends
by subsidiaries, a one-off derivative gain in the prior year amounting to $47m in other
finance costs, and recognition of a one-off gain of $72m related to the expired indemnity
to certain pre-IPO investors which was accounted for as an exceptional item. Non-
controlling interest more than doubled largely due to improved profits in several operating
companies (OpCos) with minority shareholdings, including Airtel Malawi, Airtel Niger and
Airtel Tanzania. Excluding exceptional items and the one-off $47m derivative gain, basic
restated EPS increased by 44.5%.
GAAP measures
Revenue
Reported revenue grew by 14.2%, driven by 19.4% growth in underlying constant
currency revenue, partially offset by currency devaluations, mainly in the Nigerian naira
(10%), Zambian kwacha (34%) and Kenyan shilling (5.7%), in turn partially offset by
appreciation in the Central African franc (7.1%). Reported revenue benefited from a
one-time exceptional revenue of $20m relating to a settlement in Niger.
Revenue ($m)
2020/21
2019/20
3,908
14.2%
3,422
11.2%
Operating profit
Operating profit was $1,119m, up 24.2% in reported currency, largely a function of strong
revenue growth and lower operating expenditures in proportion to revenue. In constant
currency operating profit grew by 32.8%.
1 Revenue includes one-time exceptional revenue
of $20m relating to a settlement in Niger in the
year ended March 2021
2 Growth % in reported currency
Net finance costs
Net finance costs were $423m, an increase of $51m, driven by higher other finance costs
which more than offset the reduced interest costs of $8m from lower average gross debt.
The increase in other finance costs was due to a one-off derivative gain of $47m in the
previous year.
Operating profit ($m)
2020/21
2019/20
1,119
24.2%
901
22.8%
Taxation
Total tax charges increased $92m, to $282m. The increase in tax charges was due to
higher operating profits and withholding tax on dividends by subsidiaries. The prior year
also benefited from the recognition of higher deferred tax credit of $51m in the DRC
compared with only $36m in Tanzania during the current year.
Growth % in reported currency
62
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: FinancialXreview_v79
Modification Date: 26 May 2021 8:20 am
Strategic report Profit after tax
Profit after tax, at $415m, increased by 1.8%. This was largely flat compared with the
previous year a result of the prior period recognition of a one-off gain of $72m related to
the expired indemnity to certain pre-IPO investors and a higher deferred tax credit of
$15m and one-off derivative gain of $47m in the prior year, as well as higher tax in the
current year. Excluding the prior year benefits from exceptional items and the one-off
derivative gain, profit after tax increased 47%.
Basic EPS
Basic EPS was 9.0 cents, reduced from 10.3 cents in the prior year, due to the lower
number of average shares in the previous period (EPS impact of 0.5 cents), several one-off
gains in the prior year: (i) derivative gain of $47m in other finance costs, (ii) higher
exceptional item benefits of $51m mainly from the recognition of a one-off gain of $72m
related to the expired indemnity to certain pre-IPO investors, (iii) an increase in tax charges
due to higher operating profit and withholding tax on dividends by subsidiaries, and (iv)
higher non-controlling interests due to higher profit contributions in OpCos with minority
shareholdings. Excluding exceptional items and the one-off $47m derivative gain, basic
EPS increased 44.5%. The $38m increase in non-controlling interest (up 100.8%), mainly
reflects higher profit contributions from OpCos with minority shareholdings, including
Airtel Malawi, Airtel Niger and Airtel Tanzania.
Alternative performance measures
Underlying revenue
Underlying revenue growth of 19.4% in constant currency was primarily driven by the
combination of 6.9% customer base growth to 118.2 million, and 7.7% ARPU growth.
Underlying revenue growth was recorded across all our regions; Nigeria growing by
21.9%, East Africa by 23.5% and Francophone Africa by 10%. Double-digit revenue
growth was also achieved across all our service segments, with voice growing 11.0%,
data 31.2% and mobile money 35.5%, all in constant currency.
Reported currency revenue growth further accelerated to 15.4% in Q4’21, with constant
currency revenue growth of 21.7%.
Underlying EBITDA
Underlying EBITDA, at $1,792m, increased 18.3% in reported currency while in constant
currency underlying EBITDA grew by 25.2%. The growth in underlying EBITDA was driven
by underlying revenue growth of 19.4% and improved efficiency in operating expenses.
Underlying EBITDA margin was 46.1%, an improvement of 181 basis points in reported
currency and 210 basis points in constant currency.
Foreign exchange had an adverse impact of $171m on revenue and $86m on underlying
EBITDA, reflecting currency devaluations, mainly the Nigerian naira, Zambian kwacha and
Kenya shilling, partially offset by appreciation in the Central African franc.
Underlying EBITDA margin in Q4’21 was 47.7%, an improvement of 354 basis points in
reported currency and 389 basis points in constant currency.
Profit after tax ($m)
201
Underlying EBITDA ($m)
2020/21
2019/20
1,792
46.1%
1,515
44.3%
408
(51)
50
415
296
(112)
365
(81)
March ’20
reported profit
after tax
March ’20
exceptional
items
March ’20
profit after tax
excluding one-offs
Operating profit
Finance cost
Tax
March ’21
profit after tax
excluding one-offs
March ’21
exceptional
items
March ’21
reported profit
after tax
© 2021 Friend Studio Ltd
File name: FinancialXreview_v79
Modification Date: 26 May 2021 8:20 am
Airtel Africa plc Annual Report and Accounts 2021
63
Strategic report
Financial review continued
Operating free cash flow
Operating free cash flow (underling EBITDA less capex) for the year was $1,178m,
increased by 34.9% from $873m, largely due to higher underlying EBITDA and slightly
lower capex.
Tax
The effective tax rate was 43.2% compared to 48.6% in the prior year, largely a result of
profit mix changes amongst the OpCos. The effective tax rate is higher than the weighted
average statutory corporate tax rate of approximately 33%, largely due to the profit mix
between various OpCos and higher withholding tax on dividends by subsidiaries.
The adjusted effective tax rate was 38.2% compared to 38.7% in the previous period.
Description
Reported effective tax rate
Adjusted for:
Exceptional items
Foreign exchange rate movements for non-DTA
operating companies and holding companies
One-off tax adjustment
Effective tax rate
Deferred tax triggered during the year
Adjusted effective tax rate
Year ended March 2021
Year ended March 2020
Profit before
taxation
$m
697
Income tax
expense
$m
282
Profit before
taxation
$m
598
Income tax
expense
$m
190
%
40.5%
%
31.8%
(14)
42
–
725
–
725
36
–
(5)
313
(36)
277
43.2%
38.2%
(65)
(21)
–
512
–
512
47
–
12
249
(51)
198
48.6%
38.7%
Exceptional items
An exceptional gain of $50m in the year ended 31 March 2021 consists of (i) a one-time
benefit of $20m which represents recognition of revenues pertaining to earlier years
on a cumulative catch-up basis, arising out of a settlement agreement entered with a
customer in one of the Group’s subsidiaries (referred to as the Niger telecom settlement)
(ii) a deferred tax credit of $36m in Tanzania, partially offset by (iii) one-off costs of $6m
in one of the Group’s subsidiary in Francophone Africa. Exceptional items for the year
ended 31 March 2020 mainly consisted of a $72m gain related to the expired indemnity
to certain pre-IPO investors and a deferred tax credit of $51m in the DRC.
Free cash flow
Free cash flow was $647m, 42.8% higher than last year due to the combination of an
increase in underlying EBITDA and slightly lower capex (due to logistical challenges during
the Covid-19 pandemic). This benefit was partially offset by an $81m increase in income
tax paid resulting from higher operating profits.
Free cash flow ($m)
2020/21
2019/20
453
647
42.8%
Description
Underlying EBITDA
Capex incurred
Operating free cash flow
Income tax paid
Cash interest
Change in working capital
Free cash flow
Year ended
March 2021
$m
1,792
(614)
1,178
(195)
(302)
(34)
647
March 2020
$m
1,515
(642)
873
(114)
(288)
(18)
453
Growth
%
18.3%
(4.3%)
34.9%
70.4%
4.8%
94.6%
42.8%
64
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: FinancialXreview_v79
Modification Date: 26 May 2021 8:20 am
Strategic report EPS before exceptional items
Restated EPS before exceptional items was 8.2 cents, an increase
of 18.2% on last year, with higher profits more than offsetting the
increase in other finance costs due to the recognition of a $47m
derivative gain in the prior period, higher non-controlling interest due to
higher profit in OpCos with minority shareholdings, and an increase in
tax charges due to the higher operating profit and withholding tax on
the dividends by subsidiaries. Excluding the one-time derivative gain of
$47m, restated EPS grew by 44.5%. The increase in non-controlling
interest by $38m (100.8%) is due to higher profits in several OpCos
with minority shareholdings, including Airtel Malawi, Airtel Niger and
Airtel Tanzania.
Unit of
measure
M
Description
Weighted average shares
outstanding 2020
Weighted average shares
outstanding 2021
March 2020 EPS before
exceptional items
Exchange
Operating profit (constant
$ cents
currency)
Net finance charges
$ cents
Derivatives and Forex gain/(loss) $ cents
$ cents
$ cents
M
Finance charges (excluding
derivatives and Forex)
Tax
Others
Number of shares changed
March 2021 EPS before
exceptional items
$ cents
$ cents
$ cents
$ cents
$ cents
March 2021
Reported
Restated
3,586
3,754
3,758
3,754
7.3
(1.2)
7.3
(1.5)
(0.8)
(0.7)
(2.6)
(0.7)
(0.4)
6.9
(1.2)
7.0
(1.4)
(0.8)
(0.6)
(2.5)
(0.6)
–
8.2
8.2
Description
Foreign currency
HoldCo
OpCos
Local currency
OpCos
Less: cash and
cash equivalents*
Net debt
excluding lease
liabilities
Lease liabilities
Net debt
including lease
liabilities
March 2021
March 2020
$m
2,870
2,388
482
452
452
Underlying
EBITDA
1.6x
1.3x
0.3x
0.3x
0.3x
$m
2,791
2,330
461
297
297
Underlying
EBITDA
1.8x
1.5x
0.3x
0.2x
0.2x
1,069
0.6x
1,010
0.7x
2,253
1,277
1.3x
0.7x
2,078
1,169
1.4x
0.8x
3,530
2.0x
3,247
2.1x
*Cash and cash equivalents includes term deposits with banks
Asset monetisation
With the focus on an asset-light business model and on its core
subscriber-facing operations, the Group has entered into an
agreement to sell its telecommunications tower companies in
Madagascar and Malawi to Helios Towers plc for gross consideration
of $108m. The Group’s tower portfolios in these two markets together
comprise 1,229 towers.
In addition, the Group has entered into exclusive Memorandum of
Understanding agreements for the potential sale of its tower assets in
Chad and Gabon with Helios Towers plc. The Group’s tower portfolios
in the two markets of the Proposed Transactions together comprise
c.1,000 towers.
Leverage and balance sheet measures
Leverage (net debt to underlying EBITDA) improved to 2.0x (from 2.1x
at 31 March 2020) despite investing $247m of intangible capex to
renew licences in two of our largest markets, Nigeria and Uganda,
and acquiring additional spectrum across a few of our markets.
The increase in underlying EBITDA more than offset the increase
in net debt.
The Group’s capex investment to support business growth remains
broadly stable with a capex investment of $614m during the year ended
2020/21. The full year capex is marginally reduced as compared to the
previous guidance due to logistic challenges faced during pandemic.
Description
Free cash flow (a)
Purchase of intangible assets
Issue of share capital
Proceeds from sale of shares to non-
controlling interests
Acquisition of non-controlling interest
Settlement of derivatives
Dividend paid by subsidiaries
Dividend received by HoldCos
Restated EPS (cents)
7.0
(0.2)
Year ended
March 2021
$m
647
(270)
–
March 2020
$m
453
(155)
680
–
(7)
(3)
(188)
179
34
–
97
(221)
216
6.9
5.7
(1.2)
(1.2)
(2.5)
(0.6)
8.2
March ’20
EPS before
exceptional items
One-off
derivative
gain
March ’20
EPS excluding
exceptional items
and one-off
derivative gain
Currency
devaluation
impact
(exchange rate)
Operating profit
(constant currency)
Finance
charges
Tax
Others
March ’21
EPS before
exceptional items
EPS has been restated considering all the shares as of 31 March 2021 had been issued on 1 April 2019 for like-for-like comparison.
Airtel Africa plc Annual Report and Accounts 2021
65
© 2021 Friend Studio Ltd
File name: FinancialXreview_v79
Modification Date: 26 May 2021 8:20 am
Strategic report
Financial review continued
Description
Dividend to Airtel Africa plc shareholders
Others
Subtotal (b)
Addition of lease liabilities
Foreign exchange on borrowings and cash
flows
Subtotal (c)
Net debt (increase)/decrease d= a+b+c
Opening net debt
Closing net debt
Year ended
March 2021
$m
(169)
(76)
(534)
(359)
March 2020
$m
(113)
(96)
442
(155)
(37)
(396)
(283)
3,247
3,530
18
(137)
758
4,005
3,247
Consolidated statement of financial
position
The consolidated statement of financial position is set out on page
151. Details on the major movements of our assets and liabilities
in the year are set out on this page.
Assets
Property, plant and equipment
Property, plant and equipment (including capital work in progress)
increased by $141m to $2,232m. This was due to capital expenditure
of $614m linked to continued investment in network assets, which
was partially offset by $389m of depreciation.
Purchase of intangible assets
Purchase of intangible assets of $270m mainly includes $182m paid
for licence renewal in Nigeria and $65m in Uganda in the year ended
31 March 2021. Previous year amount of $155m includes $128m for
spectrum in Nigeria.
Right of use assets
Right of use assets increased by $160m to $799m. The increase
of $359m was due to capitalisation of present value of
telecommunication towers taken on long-term lease partially
offset by $183m of depreciation.
Issue of share capital
For the year ended 31 March 2020, this represents $680m net
proceeds from the Airtel Africa plc IPO.
Settlement of derivatives
We took interest rate swap and currency swap contracts from various
banks against our outstanding USD bonds. These bonds are all
fixed-rate bonds, and to hedge our exposure from market interest rate
fluctuations we entered fixed-to-floating interest rate swap (IRS)
contracts for USD bonds. In the year ended 31 March 2020, these IRS
contracts were cancelled and realised in cash for $122m. Further, in
the year ended 31 March 2020, an amount of $25m was paid on
maturity of derivatives taken against CHF bonds.
Dividend paid to shareholders
During the year, the Board approved a new progressive dividend policy.
The newly adopted dividend policy aims to grow the dividend annually
by a mid- to high- single-digit percentage from a base of 4 cents per
share for financial year 2020/21, until reported leverage falls below
2.0x. The Board will reassess the dividend policy in light of the growth
outlook of the Group.
March 2021 had a final dividend payment of 3.0 cents per ordinary
share for year ended 31 March 2020 and an interim dividend payment
of 1.5 cents per ordinary share.
The Board recommended a final dividend of 2.5 cents per share.
Others
Others includes payment to capex creditors over and above capex
incurred, share issue expenses and changes in non-operating working
capital.
Foreign exchange on borrowings and cash flows
Foreign exchange on borrowings and cash flows for the year ended
31 March 2021 primarily represents loss on account of restatement
of EUR bonds due to appreciation of EUR against US dollar.
Financial information by service
We provide performance data for our mobile voice and data services
and Airtel Money in our business reviews on pages 44-47.
Financial information by market
We provide performance data for each of our markets in our business
reviews on pages 38-43.
66
Airtel Africa plc Annual Report and Accounts 2021
Other intangible assets
Other intangible assets, including assets under development, increased
by $249m to $735m. This relates to $270m of investment in licence/
spectrum and capitalisation of present value of deferred spectrum
charges amounted to $102m partially offset by $109m of amortisation.
Current assets
Current assets increased by $234m to $1,905m largely contributed
by: (i) cash and cash equivalents and other bank balances increased
by $79m due to cash generated by the business, and (ii) balance held
under mobile money trust – these increased by $145m; it represents
the balance held on behalf of mobile money customers which is not
available for use by the Group.
Total equity and liabilities
Equity attributable to owners of the company
Equity attributable to the owners of the company increased by $17m to
$3,405m. This was linked to the $339m profit for the period, partially
offset by $169m dividend paid to shareholders of Airtel Africa and
$140m other comprehensive losses primarily due to exchange losses.
Borrowings
Gross borrowings (including short-term borrowings and current
portion of long-term borrowings) increased by $337m to $4,616m.
This was largely due to increase in lease liabilities by $108m and
drawdown of external loan. Net debt of the Group as of 31 March 2021
was $3,530m.
Non-current liabilities
Non-current liabilities (excluding borrowings) increased by $87m.
This was largely due to a liability created against capitalisation of
present value of deferred spectrum charges.
Current liabilities
Current liabilities (excluding borrowings) increased by $171m to $1,796m.
This was largely due to a $140m increase in mobile money wallet
balance. Further details on Group’s liquidity position and going concern
assessment are shown on page 154, note 2.2 of financial statements.
Dividends
The Board has recommended a final dividend of 2.5 cents per ordinary
share for the year ended 31 March 2021. The proposed final dividend
will be paid on 23 July 2021 to all ordinary shareholders who are on
the register of members at the close of business on 25 June 2021.
We will announce more details in due course. We paid an interim
dividend of 1.5 cents per ordinary share in December 2020.
© 2021 Friend Studio Ltd
File name: FinancialXreview_v79
Modification Date: 26 May 2021 8:20 am
Strategic report Alternative performance measures (APMs)
Introduction
In the reporting of financial information, the directors
have adopted various APMs. These measures are
not defined by International Financial Reporting
Standards (IFRS) and therefore may not be directly
comparable with other companies’ APMs, including
those in our industry.
APMs should be considered in addition to, and are
not intended to be a substitute for, or superior to,
IFRS measurements.
Purpose
The directors believe that these APMs assist in providing additional
useful information on the underlying trends, performance and position
of the Group.
APMs are also used to enhance the comparability of information
between reporting periods and geographical units (such as like-for-like
sales), by adjusting for non-recurring or uncontrollable factors which
affect IFRS measures, to aid users in understanding the Group’s
performance.
Consequently, APMs are used by the directors and management for
performance analysis, planning, reporting and incentive-setting
purposes.
The directors believe the following metrics to be the APMs used by the
Group to help evaluate growth trends, establish budgets and assess
operational performance and efficiencies. These measures provide an
enhanced understanding of the Group’s results and related trends,
therefore increasing transparency and clarity into the core results of
the business.
The following metrics are useful in evaluating our operating performance:
Closest
equivalent
IFRS measure
Adjustment to reconcile
to IFRS measure
Table
reference1 Definition and purpose
Revenue
• Exceptional item
Table A
APM
Underlying
revenue
Underlying
EBITDA and
margin
Operating
profit
• Depreciation and
amortisation
Table B
• Charity and donation
• Exceptional item
The Group defines underlying revenue as revenue for the period adjusted
for exceptional items.
The directors view underlying revenue to be a meaningful measure to
analyse the Group’s revenue, excluding exception items.
Exceptional items are additional specific items that because of their size,
nature or incidence in the results, are considered to hinder comparison of
the Group’s performance on a period to period basis and could distort the
understanding of our performance for the period and the comparability
between periods and hence are adjusted to arrive at underlying revenue.
The Group defines underlying EBITDA as operating profit/(loss) for the
period before depreciation and amortisation, charity and donation, and
adjusted for exceptional items.
Group defines underlying EBITDA margin as underlying EBITDA divided
by total underlying revenue.
Underlying EBITDA and margin are measures used by the directors
to assess the trading performance of the business and are therefore
the measure of segment profit that the Group presents under IFRS.
Underlying EBITDA and margin are also presented on a consolidated
basis because the directors believe it is important to consider profitability
on a basis consistent with that of the Group’s operating segments. When
presented on a consolidated basis, underlying EBITDA and margin are
APMs.
Depreciation and amortisation is a non-cash item which fluctuates
depending on the timing of capital investment and useful economic life.
directors believe that a measure which removes this volatility improves
comparability of the Group’s results period on period and hence is
adjusted to arrive at underlying EBITDA and margin.
Charity and donations are not related to the trading performance of the
Group and hence adjusted to arrive at underlying EBITDA and margin.
Exceptional items are additional specific items that because of their size,
nature or incidence in the results, are considered to hinder comparison of
the Group’s performance on a period to period basis and could distort the
understanding of our performance for the period and the comparability
between periods and hence are adjusted to arrive at underlying EBITDA
and margin.
© 2021 Friend Studio Ltd
File name: APMs_v33
Modification Date: 25 May 2021 5:37 pm
Airtel Africa plc Annual Report and Accounts 2021
67
Strategic report Alternative performance measures (APMs) continued
Closest
equivalent
IFRS measure
Profit/(loss)
before tax
APM
Underlying
profit/(Loss)
before tax
Adjustment to reconcile
to IFRS measure
Table
reference1 Definition and purpose
• Exceptional items
Table C
The Group defines underlying profit/(loss) before tax as profit/(loss)
before tax adjusted for exceptional items.
Effective
tax rate
Reported
tax rate
• Exceptional items
Table D
• Foreign exchange rate
movements
• One-off tax impact
of prior period, tax
litigation settlement
and impact of tax on
permanent differences
The directors view underlying profit/(loss) before tax to be a meaningful
measure to analyse the Group’s profitability.
Exceptional items are additional specific items that because of their size,
nature or incidence in the results, are considered to hinder comparison of
the Group’s performance on a period to period basis and could distort the
understanding of our performance for the period and the comparability
between periods and hence are adjusted to arrive at underlying profit/
(loss) before tax.
The Group defines effective tax rate as reported tax rate (reported tax
charge divided by reported profit before tax) adjusted for exceptional
items, foreign exchange rate movements and one-off tax items of prior
year adjustment, tax settlements and impact of permanent differences
on tax.
This provides an indication of the current ongoing tax rate across the
Group.
Exceptional items are additional specific items that because of their size,
nature or incidence in the results, are considered to hinder comparison of
the Group’s performance on a period to period basis and could distort the
understanding of our performance for the period and the comparability
between periods and hence are adjusted to arrive at effective tax rate.
Foreign exchange rate movements are specific items that are non-tax
deductible in few of the entities which are loss making and where DTA is
not yet triggered and hence are considered to hinder comparison of the
Group’s effective tax rate on a period to period basis and therefore
excluded to arrive at effective tax rate.
One-off tax impact on account of prior year adjustment, any tax litigation
settlement and tax impact on permanent differences are additional
specific items that because of their size and frequency in the results, are
considered to hinder comparison of the Group’s effective tax rate on a
period to period basis.
Adjusted
effective
tax rate
Reported
tax rate
• Deferred tax triggered
during the year and
accounted as
exceptional tax item
Table D
The Group defines adjusted effective tax rate as effective tax rate after
normalizing any impact arising on account of deferred tax triggered during
the year for the first time which has been reported as exceptional item.
This provides an indication of the tax rate across the Group for the current
financial year after considering any deferred tax triggered during the year.
Underlying
profit/(loss)
after tax
Profit/(loss)
for the period
• Exceptional items
Table E
EPS
• Exceptional items
Table F
Earnings per
share before
exceptional
items
The Group defines underlying profit/(loss) after tax as profit/(loss) for the
period adjusted for exceptional items.
The directors view underlying profit/(loss) after tax to be a meaningful
measure to analyse the Group’s profitability.
Exceptional items are additional specific items that because of their size,
nature or incidence in the results, are considered to hinder comparison of
the Group’s performance on a period to period basis and could distort the
understanding of our performance for the period and the comparability
between periods and hence are adjusted to arrive at underlying profit/
(loss) after tax.
The Group defines earnings per share before exceptional items as profit/
(loss) for the period before exceptional items attributable to owners of the
company divided by the weighted average number of ordinary shares in
issue during the financial period.
This measure reflects the earnings per share before exceptional items for
each share unit of the company.
Exceptional items are additional specific items that because of their size,
nature or incidence in the results, are considered to hinder comparison of
the Group’s performance on a period to period basis and could distort the
understanding of our performance for the period and the comparability
between periods and hence are adjusted to arrive at earnings for the
purpose of earnings per share before exceptional items.
68
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: APMs_v33
Modification Date: 25 May 2021 5:37 pm
Strategic report APM
Operating
free cash
flow
Closest
equivalent
IFRS measure
Cash
generated
from
operating
activities
Adjustment to reconcile
to IFRS measure
Table
reference1 Definition and purpose
• Income tax paid
Table H
• Changes in working
capital
• Other non-cash items
• Non-operating income
• Charity and donation
• Exceptional items
• Capital expenditure
The Group defines operating free cash flow as net cash generated from
operating activities before income tax paid, changes in working capital,
other non-cash items, non-operating income, charity and donation and
exceptional items less capital expenditure. The Group views operating free
cash flow as a key liquidity measure, as it indicates the cash available to
pay dividends, repay debt or make further investments in the Group.
Free cash
flow
Cash
generated
from
operating
activities
• Changes in working
Table I
capital
• Capital expenditure
• Income tax paid
• Cash interest
The Group defines free cash flow as net cash generated from operating
activities after change in operating working capital, income tax paid and
cash interest. It is calculated as ‘underlying EBITDA less change in
operating working capital, capital expenditure, income tax paid and
cash interest’.
The Group views free cash flow as a key liquidity measure, as it indicates
the cash available to pay dividends, repay debt or make further
investments in the Group.
Net debt and
leverage
ratio
No direct
equivalent
• Borrowing
• Lease liabilities
• Cash and cash
equivalent
• Term deposits with
banks
• Fair value hedges
Table J
The Group defines net debt as borrowings including lease liabilities less
cash and cash equivalents, term deposits with banks, processing costs
related to borrowings and fair value hedge adjustments.
The Group defines leverage ratio as net debt divided by underlying
EBITDA.
The directors view net debt and the leverage ratio to be meaningful
measures to monitor the Group’s ability to cover its debt through its
earnings.
Return on
capital
employed
No direct
equivalent
• Exceptional items to
arrive at underlying
EBIT
Table K
Group defines return on capital employed (‘ROCE’) as underlying EBIT
divided by average capital employed.
The directors view return on capital employed as a financial ratio that
measures Group’s profitability and the efficiency with which its capital is
being utilised.
The Group defines underlying EBIT as operating profit/(loss) for the period
adjusted for exceptional items.
Exceptional items are additional specific items that because of their size,
nature or incidence in the results, are considered to hinder comparison of
the Group’s performance on a period to period basis and could distort the
understanding of our performance for the period and the comparability
between periods and hence are adjusted to arrive at underlying EBIT.
Capital employed is defined as sum of equity attributable to owners of
the company, non-controlling interests and net debt. Average capital
employed is average of capital employed at the closing and beginning
of the relevant period.
1 Refer to reconciliation between GAAP and alternative performance measures for respective table
Some of the Group’s IFRS measures and APMs are translated at constant currency exchange rates to measure organic performance of the
Group. In determining the percentage change in constant currency terms, both current and previous financial reporting period’s results have
been converted using exchange rates prevailing as of 31 March 2020. Reported currency percentage change is derived on the basis of average
actual periodic exchange rates for that financial period. Variance between constant currency and reported currency percentage are due to
exchange rate movements between previous financial reporting period and current period.
Changes to APMs
Definition of underlying EBITDA margin has been clarified as underlying EBITDA divided by underlying revenue. Underlying revenue is included in
the APM and is defined as revenue for the period adjusted for exceptional items. The reason for using underlying revenue is because exceptional
revenue has been recorded for the first time in the year ended 31 March 2021. Return on capital employed has been included in the APM and is
defined as underlying EBIT divided by average capital employed. ROCE is a financial ratio that measures Group’s profitability and efficiency with
which its capital is being utilised.
© 2021 Friend Studio Ltd
File name: APMs_v33
Modification Date: 25 May 2021 5:37 pm
Airtel Africa plc Annual Report and Accounts 2021
69
Strategic report Alternative performance measures (APMs) continued
Reconciliation between GAAP and Alternative Performance Measures
Table A: Underlying revenue
Table C: Underlying profit/(loss) before tax
Description
Revenue
Less:
Exceptional items
Underlying revenue
Year ended
March 2021
$m
March 2020
$m
3,908
3,422
(20)
3,888
–
3,422
Description
Profit/(loss) before tax
Exceptional items (net)
Underlying profit/(loss) before tax
Year ended
March 2021
$m
697
(14)
683
March 2020
$m
598
(65)
533
Table B: Underlying EBITDA and margin
Description
Operating profit
Add:
Depreciation and amortisation
Charity and donation
Exceptional items
Underlying EBITDA
Revenue
Underlying EBITDA margin (%)
Year ended
March 2021
$m
1,119
March 2020
$m
901
681
6
(14)
1,792
3,888
46.1%
632
5
(23)
1,515
3,422
44.3%
Table D: Effective tax rate and adjusted effective tax rate
Description
Reported effective tax rate
Adjusted for:
Exceptional Items (provided below)
Foreign exchange rate movements for non-DTA OpCos
and HoldCos
One-off tax adjustment
Effective tax rate
Deferred tax triggered during the year
Adjusted effective tax rate
Exceptional items
1. Deferred tax asset recognition
2. Network modernisation
3. Employee restructuring
4. Service revenues
5. Reversal of indemnities
6. Share issue and IPO-related expenses
7. Finance cost
8. Customer acquisition cost
Total
Table E: Underlying profit/(loss) after tax
March 2021
Profit before
taxation
$m
697
Income tax
expense
$m
282
Profit before
taxation
$m
598
March 2020
Income tax
expense
$m
190
Tax rate
%
40.5%
Tax rate
%
31.8%
(14)
36
–
(5)
313
(36)
277
36
43.2%
38.2%
42
725
725
6
(20)
(14)
36
(65)
(21)
512
512
27
(72)
6
1
(27)
(65)
47
12
249
(51)
198
51
2
(6)
47
48.6%
38.7%
Description
Profit/(loss) after tax
Exceptional items
Underlying profit/(loss) after tax
Year ended
March 2021
$m
415
(50)
365
March 2020
$m
408
(112)
296
70
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: APMs_v33
Modification Date: 25 May 2021 5:37 pm
Strategic report
Table F: Earnings per share before exceptional items
Table I: Free cash flow
Unit of
measure
Description
Profit/(loss) after tax before
exceptional items attributable
to owners of the company
(see table G)
Weighted average number of ordinary
shares in issue during the financial
period
Earnings per share before
exceptional items
$m
million
cents
Table G: Earnings per share – restated
$m
Unit of
measure
Description
Weighted average shares
million
Weighted average shares – restated million
Profit for the period attributable
to owners of the company
Operating and non-operating
exceptional items
Tax exceptional items
Non-controlling interest
exceptional item
Profit attributable to owners of the
company – pre-exceptional items $m
Basic EPS
EPS before exceptional items
Basic EPS – restated1
EPS before exceptional items
– restated1
cents
cents
cents
$m
$m
cents
$m
Year ended
March 2021 March 2020
308
261
3,758
3,586
8.2
7.3
Year ended
March 2021 March 2020
3,586
3,754
3,758
3,754
Description
Underlying EBITDA
Less: capital expenditure
Operating free cash flow
Add: changes in working capital
Increase in trade receivables
Increase in inventories
Decrease in trade payables
Decrease in income received in advance
Increase in deferred revenue
Operating cash flow after changes in
working capital
Less: Income tax paid
Less: cash interest (net)
Free cash flow
339
370
Table J: Net debt and leverage
(14)
(36)
19
308
9.0
8.2
9.0
8.2
(65)
(47)
3
261
10.3
7.3
9.8
6.9
Description
Long-term borrowing, net of current portion
Short-term borrowings and current portion
of long-term borrowing
Add: processing costs related to borrowings
Add/(less): fair value hedge adjustment
Less: cash and cash equivalents
Less: term deposits with banks
Net debt excluding lease liabilities
Add: lease liabilities
Net debt including lease liabilities
Underlying EBITDA (LTM)
Leverage (LTM) (times)
Table K: Return on capital employed
Year ended
March 2021
$m
1,792
(614)
1,178
March 2020
$m
1,515
(642)
873
(8)
(4)
(38)
(1)
17
1,144
(195)
(302)
647
(11)
(1)
(15)
(11)
20
855
(114)
(288)
453
As at
March 2021
$m
1,871
March 2020
$m
2,446
1,468
5
(21)
(813)
(257)
2,253
1,277
3,530
1,792
2.0
664
5
(27)
(1,010)
–
2,078
1,169
3,247
1,515
2.1
1 EPS has been restated considering all the shares as of 31 March 2021 had been
issued on 1 April 2019 for like-for-like comparison
Table H: Operating free cash flow
Description
Net cash generated from operating
activities
Add: Income tax paid
Net cash generation from operation
before tax
Less: changes in working capital
Increase in trade receivables
Increase in inventories
Decrease in trade payables
Increase in mobile money wallet balance
Increase in provisions
Increase in deferred revenue
Decrease in income received in advance
Increase in other financial and non-financial
liabilities
Increase in other financial and non-financial
assets
Operating cash flow before changes
in working capital
Other adjustments
Charity and donation
Exceptional items
Underlying EBITDA
Less: capital expenditure
Operating free cash flow
Year ended
March 2021
$m
March 2020
$m
1,666
195
1,387
114
1,861
1,501
8
4
38
(139)
(1)
(17)
1
(18)
48
1,785
15
6
(14)
1,792
(614)
1,178
11
1
15
(53)
(2)
(20)
11
(4)
28
1,488
45
5
(23)
1,515
(642)
873
© 2021 Friend Studio Ltd
File name: APMs_v33
Modification Date: 25 May 2021 5:37 pm
Description
Operating profit
Less:
Exceptional items
Underlying EBIT
Equity attributable to owners
of the company
Non-controlling interests (NCI)
Net debt (see table J)
Capital employed
Average capital employed1
Return on capital employed
Unit of
measure
$m
Year ended
March 2021 March 2020
901
1,119
$m
$m
$m
$m
$m
$m
$m
%
(14)
1,105
3,405
(52)
3,530
6,883
6,705
16.5%
4
905
3,388
(107)
3,247
6,528
6,481
14.0%
1 Capital employed at the beginning of year ended 31 March 2021 and 2020 is
$6,528m and $6,435m respectively
Airtel Africa plc Annual Report and Accounts 2021
71
Strategic report
Managing our risk
Understanding and managing
our risk environment to support
the Group’s objectives
Our actively managed
risk framework provides
essential support to
our key operating and
financial decisions at
Airtel Africa – and
assessing and managing
risk underpins day-to-day
working in all of our
operating companies
and functions.
Ravi Rajagopal
Chair, Audit and Risk Committee
Managing our risks
We operate in 14 markets across Africa. Our markets
offer both long term growth opportunities and a
diverse range of risks and uncertainties. Managing
these risks is an essential part of delivering our
strategy. It means we can continue to create value
for our business and shareholders, and for the
millions of people whose lives we help transform.
Identifying and managing risk
The directors have carried out a robust assessment of the company’s
principal and emerging risks to comply with Provision 28 of the
Governance Code. We have designed our risk management
framework to give us a consistent means of identifying, mitigating and
monitoring risk across all 14 of our operating companies and Group
entities. It provides senior management and our Board with oversight
over our principal risks, and promotes a bottom-up approach to
identifying and managing risks across the Group.
Risk management governance
The Airtel Africa plc Board has overall responsibility for the Group’s risk
management framework and processes. Through the Audit and Risk
Committee, the Board oversees the Group’s risk management
framework and regularly reviews its principal risks as well as emerging
risks that may impact the Group. Within that overarching framework,
the governance of risk management has been cascaded to various
levels across the organisation to allow effective management of the
Group’s risks. The framework covers the interplay between risks
impacting Airtel Africa as a whole and risks identified at either the
operating company (OpCo) level (geography-related) or the functional
level (business function-related). Our Group Executive Risk Committee
evaluates and prioritises the principal risks with the potential to
undermine our strategy, business model and solvency, in line with our
overall risk appetite. The committee also reviews on an ongoing basis
the external business environment to identify emerging risks which
could potentially have an impact on the Group’s business in the future.
Group functional teams identify functional risks cutting across our
operating companies (OpCos) to create a consistent Group-wide risk
mitigation strategy for similar risks. We operate a similar risk
management governance structure at Group level and within our
OpCos, with both having an Executive Risk Management Committee,
and with overall risk management responsibility resting with the
respective boards. Each OpCo identifies risks within their business
environment and takes appropriate mitigation actions. The
governance of risk management at each OpCo rests with the OpCo
Executive Risk Committee (ERC) and the OpCo Board, which is
responsible for risk management processes and oversees the OpCo’s
principal risks and the effectiveness of its mitigation actions.
72
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: ManagingXourXrisk_v44
Modification Date: 25 May 2021 5:38 pm
Strategic report Board – Audit and
Risk Committee
The Board has overall
responsibility for the Group’s
risk management processes.
Through the Audit and Risk
Committee, the Board oversees
the Group risk management
framework and regularly
reviews our principal risks.
Group Executive
Risk Committee
The Executive Risk Committee
(ERC) is responsible for the
implementation of the risk
management framework
across the Group. The ERC
reviews our significant risks
and the progress and
effectiveness of mitigation
actions. It continually monitors
and assesses new and
emerging risks.
Functional Risk
Management Committee
The Group executive functional
heads are responsible for
identifying and mitigating risks
at a functional level. The
Group’s risk register is created
from risks identified either by
the Group functional heads
or the OpCo Executive Risk
Committees.
OpCo Executive
Risk Committee
and OpCo Board
The OpCo Executive Risk
Committee (ERC) performs
a similar role to the Group
ERC. It is responsible for
implementing the risk
management framework in our
subsidiaries. It identifies risks
within the local environment
and mitigation actions to
manage those risks. Each OpCo
Board has overall responsibility
for the risk management
process within that OpCo.
Risk identification process
IDENTIFY
RISK ANALYSIS
RANK
OpCo
Function
Risks are identified by
analysing external and
internal context both at
an operating subsidiary and
at a Group functional level
Discuss and validate each risk
Assess each risk
Likelihood
Impact
Identified risks are assessed on
Likelihood of
occurrence
Impact/
consequence
Score and prioritise
each risk
Each risk is then assigned
a risk rating based on the
likelihood of occurrence
and the possible impact/
consequence
Risk rating
Airtel Africa’s
principal risks
Risks impacting the
Group’s strategy,
business model
and solvency
Emerging risks
Ongoing review
of the external
environment and
potential risks
How we classify our risks
We classify our risks using the below
categorisation methodology. The risk
classification allows for a consistent
approach for risk identification across
the Group.
Strategic risks: 1 2 3
External risks such as changes in market
dynamics or risks to strategic partnerships.
Operational risks: 4 5 6 7 8 9
Risks affecting our ability to effectively
operate our business model across
a variety of functional areas.
Financial risks: 10
Risks impacting our liquidity or solvency,
financial reporting or capital structure.
Governance and compliance risks: 11
Risks affecting our ability to comply with our
legal, regulatory and governance obligations.
Risk heat map (residual risks)
t
s
o
m
A
l
i
n
a
t
r
e
c
D
O
O
H
I
L
E
K
I
L
l
y
e
k
L
i
i
l
e
b
s
s
o
P
6
2
1
7
10
11
5
3
9
8
4
l
y
e
k
i
l
n
U
1 Adverse competition and
market disruption
3 Digitalisation and innovation
3 Covid-19
4 Technology obsolescence
5 Cyber and information
security threats
6 Increase in cost structure
7 Leadership succession
planning
8 Internal controls and
compliance
9 Network resilience and
business continuity
10 Exchange rate fluctuations
and availability of funds for
repatriation
11 Non-compliance to legal and
regulatory requirements
Minor
Moderate
Significant
Extreme
I M P A C T
Airtel Africa plc Annual Report and Accounts 2021
73
© 2021 Friend Studio Ltd
File name: ManagingXourXrisk_v44
Modification Date: 25 May 2021 5:38 pm
Strategic report
Managing our risk continued
Our principal risks, and how we mitigate them
1. Adverse competition
and market disruption
We operate in an increasingly competitive
environment across our markets and
segments, particularly with respect to pricing
and market share. Aggressive competition by
existing players or the entry of a new player
could put a downward pressure on prices,
adversely affecting our revenue and margins,
as well as our profitability and long term
survival. The nature and level of the
competition we face varies for each of our
markets, products and services.
How we mitigate this risk
1. Ongoing monitoring of competitive
landscape and competitor activities
2. Driving penetration of bundle offerings to
lock in customers, increase affordability
and reduce churn
3. The continued growth of our Airtel Money
business and the increased penetration of
our GSM customers using Airtel Money
services helps to increase customer
stickiness on our network
4. Simplifying customer experience through
self-care and other apps, and customer
touchpoints
Strategic risks
2. Digitisalition and
3. Covid-19
innovation
Failure to innovate through simplifying the
customer experience, developing adequate
digital touchpoints in line with changing
customer needs and competitive landscape
could lead to loss of customers and market
share. We need to continually innovate to
simplify our user experience, make our
business processes more agile, and develop
more digital touchpoints to reach our
customers and meet their changing needs.
Covid-19 continues to be both a healthcare
crisis and a major disruptor in the lives of
people and the economic activities of
businesses and governments across the
world. The pandemic has underlined how
critical telecoms are to the countries in which
we operate, and throughout the crisis we have
maintained our services as well as supporting
communities, including by coordinating
medical relief with respective governments.
While the pandemic has shown the continued
resilience of our operating model, we continue
to monitor the evolution of the pandemic to
prevent any negative adverse impact on the
Group’s ability to operate its business
effectively.
How we mitigate this risk
1. Roll out of digital apps and self-care
How we mitigate this risk
1. The Group’s business continuity plans
channels to simplify customer experience
2. Set up of Airtel Africa Digital Labs focused
on developing cutting edge digital
solutions to address customer needs and
solve complex problems using the latest
technologies
3. Simplifying our core IT systems and
integration capabilities to allow for faster
deployment of new products and services
and integration with third-party
applications
continue to be in place ensuring minimal
disruption in our abilities to provide critical
telecom services
2. Ongoing crisis monitoring by the crisis
management team at the Group office
through regular engagement with the
OpCo crisis management teams with
overall oversight by the Executive
Committee
3. To protect the health and safety of our
employees, the Group’s operations
continue to adopt a work from home policy
with a predominant number of the Group’s
employees working remotely
4. Availability of digital self-care channels
through which customers can access the
company’s products and services and
resolve basic customer queries
Link to strategy
Basic building block for all strategic intent
Link to strategy
Link to strategy
4. Technology
obsolescence
5. Cyber and information
6. Increase in cost structure
security threats
An inability to effectively and efficiently
invest and upgrade our network and IT
infrastructure would affect our ability to
compete effectively in the market. While
we continually invest in improving and
Cybersecurity threats through internal or
Adverse changes in our external business
external sabotage or system vulnerabilities
environment and/or supply chain processes
could potentially result in customer data
could lead to a significant increase in our
breaches and/or service downtimes. Like any
operating cost structure and negatively
other business, we are increasingly exposed
impacting profitability. Our operating costs
maintaining our networks and IT systems to
to the risk that third parties or malicious
are subject to supply chain risks including
address current levels of volume and capacity
insiders may attempt to use cyber-crime
fluctuations in global commodity prices,
growth, we need to continue to commit
techniques, including distributed denial of
market uncertainty, energy costs (such as
substantial capital to keep pace with rapid
service attacks, to disrupt the availability,
diesel and electricity), and the cost of
changes in technology and the competitive
confidentiality and integrity of our IT systems.
obtaining and maintaining licences, spectrum
landscape.
This could disrupt our key operations, make it
and other regulatory requirements. Prevailing
difficult to recover critical services and
macroeconomic conditions and a variety of
damage our assets.
other factors beyond our control also
contribute to this risk. We need to continually
re-evaluate our operating model and cost
structure to identify innovative ways to
optimise our costs.
How we mitigate this risk
How we mitigate this risk
How we mitigate this risk
1. Refreshing our IT infrastructure with focus
1. Ongoing review and implementation of
1. Continuous review of our operating model
on cloud technology
security controls to mitigate possible
and supply chain processes to identify cost
2. Network modernisation project involving
system vulnerabilities
optimisation opportunities
upgrades to our core (mobile switching)
2. Awareness campaign and training of
2. Rolling out various initiatives to optimise
and packet (mobile data) networks
employees on IT and cybersecurity risks
our operating structure to improve
and control measures
business performance
3. Reducing the cost of network operations
by adopting radio agnostic technology,
3. Continuing to identify risk and assess
single RAN, which allows easy switching of
vulnerability
network resources and spectrum between
2G, 3G and 4G networks at minimal
marginal costs
Link to strategy
Link to strategy
Link to strategy
Risk owner
Chief sales and marketing officer
Risk owner
Chief information officer
Risk owner
Chief executive officer
Risk owner
Chief technology officer
Chief information officer
Risk owner
Chief information officer
Risk owner
Chief supply chain officer
74
Airtel Africa plc Annual Report and Accounts 2021
See our strategy on pages 24-31
© 2021 Friend Studio Ltd
File name: ManagingXourXrisk_v44
Modification Date: 25 May 2021 5:38 pm
Key to our strategic pillars Win with network Win with customers Win with data Win with mobile money Win with cost Win with peopleStrategic report
1. Adverse competition
2. Digitisalition and
3. Covid-19
and market disruption
innovation
We operate in an increasingly competitive
Failure to innovate through simplifying the
Covid-19 continues to be both a healthcare
environment across our markets and
customer experience, developing adequate
crisis and a major disruptor in the lives of
segments, particularly with respect to pricing
digital touchpoints in line with changing
people and the economic activities of
and market share. Aggressive competition by
customer needs and competitive landscape
businesses and governments across the
existing players or the entry of a new player
could lead to loss of customers and market
world. The pandemic has underlined how
could put a downward pressure on prices,
share. We need to continually innovate to
critical telecoms are to the countries in which
adversely affecting our revenue and margins,
simplify our user experience, make our
we operate, and throughout the crisis we have
as well as our profitability and long term
business processes more agile, and develop
maintained our services as well as supporting
survival. The nature and level of the
more digital touchpoints to reach our
communities, including by coordinating
competition we face varies for each of our
customers and meet their changing needs.
medical relief with respective governments.
markets, products and services.
While the pandemic has shown the continued
resilience of our operating model, we continue
to monitor the evolution of the pandemic to
prevent any negative adverse impact on the
Group’s ability to operate its business
effectively.
How we mitigate this risk
How we mitigate this risk
How we mitigate this risk
1. Ongoing monitoring of competitive
landscape and competitor activities
1. Roll out of digital apps and self-care
1. The Group’s business continuity plans
channels to simplify customer experience
continue to be in place ensuring minimal
2. Driving penetration of bundle offerings to
2. Set up of Airtel Africa Digital Labs focused
lock in customers, increase affordability
on developing cutting edge digital
disruption in our abilities to provide critical
telecom services
and reduce churn
solutions to address customer needs and
2. Ongoing crisis monitoring by the crisis
solve complex problems using the latest
management team at the Group office
3. The continued growth of our Airtel Money
business and the increased penetration of
technologies
our GSM customers using Airtel Money
3. Simplifying our core IT systems and
services helps to increase customer
stickiness on our network
integration capabilities to allow for faster
deployment of new products and services
and integration with third-party
4. Simplifying customer experience through
self-care and other apps, and customer
applications
touchpoints
through regular engagement with the
OpCo crisis management teams with
overall oversight by the Executive
Committee
3. To protect the health and safety of our
employees, the Group’s operations
continue to adopt a work from home policy
with a predominant number of the Group’s
employees working remotely
4. Availability of digital self-care channels
through which customers can access the
company’s products and services and
resolve basic customer queries
Basic building block for all strategic intent
4. Technology
obsolescence
An inability to effectively and efficiently
invest and upgrade our network and IT
infrastructure would affect our ability to
compete effectively in the market. While
we continually invest in improving and
maintaining our networks and IT systems to
address current levels of volume and capacity
growth, we need to continue to commit
substantial capital to keep pace with rapid
changes in technology and the competitive
landscape.
How we mitigate this risk
1. Refreshing our IT infrastructure with focus
on cloud technology
2. Network modernisation project involving
upgrades to our core (mobile switching)
and packet (mobile data) networks
3. Reducing the cost of network operations
by adopting radio agnostic technology,
single RAN, which allows easy switching of
network resources and spectrum between
2G, 3G and 4G networks at minimal
marginal costs
Operational risks
5. Cyber and information
6. Increase in cost structure
security threats
Cybersecurity threats through internal or
external sabotage or system vulnerabilities
could potentially result in customer data
breaches and/or service downtimes. Like any
other business, we are increasingly exposed
to the risk that third parties or malicious
insiders may attempt to use cyber-crime
techniques, including distributed denial of
service attacks, to disrupt the availability,
confidentiality and integrity of our IT systems.
This could disrupt our key operations, make it
difficult to recover critical services and
damage our assets.
Adverse changes in our external business
environment and/or supply chain processes
could lead to a significant increase in our
operating cost structure and negatively
impacting profitability. Our operating costs
are subject to supply chain risks including
fluctuations in global commodity prices,
market uncertainty, energy costs (such as
diesel and electricity), and the cost of
obtaining and maintaining licences, spectrum
and other regulatory requirements. Prevailing
macroeconomic conditions and a variety of
other factors beyond our control also
contribute to this risk. We need to continually
re-evaluate our operating model and cost
structure to identify innovative ways to
optimise our costs.
How we mitigate this risk
1. Ongoing review and implementation of
security controls to mitigate possible
system vulnerabilities
How we mitigate this risk
1. Continuous review of our operating model
and supply chain processes to identify cost
optimisation opportunities
2. Awareness campaign and training of
employees on IT and cybersecurity risks
and control measures
2. Rolling out various initiatives to optimise
our operating structure to improve
business performance
3. Continuing to identify risk and assess
vulnerability
Link to strategy
Link to strategy
Link to strategy
Link to strategy
Link to strategy
Link to strategy
Risk owner
Risk owner
Chief sales and marketing officer
Chief information officer
Risk owner
Chief executive officer
Risk owner
Chief technology officer
Chief information officer
Risk owner
Chief information officer
Risk owner
Chief supply chain officer
© 2021 Friend Studio Ltd
File name: ManagingXourXrisk_v44
Modification Date: 25 May 2021 5:38 pm
Airtel Africa plc Annual Report and Accounts 2021
75
Strategic report
Managing our risk continued
Our principal risks, and how we mitigate them
Operational risks
7. Leadership succession
planning
8. Internal controls
and compliance
9. Network resilience and
business continuity
We need to continually identify and develop
successors for key leadership positions
across our organisation to ensure minimal
disruption to the execution of our corporate
strategy. Our ability to execute our business
strategies depends in large part on the efforts
of our key people. In some of the countries in
which we operate, there’s a shortage of skilled
telecommunications professionals. Any failure
to successfully recruit, train, integrate, retain
and motivate key skilled employees could
have a material adverse effect on our
business, the results of our operations,
financial condition and prospects.
Gaps in our internal control and compliance
environment could affect our reputation and
lead to financial losses. Our financial reporting
is subject to the risk that controls may
become inadequate due to changes in
internal or external conditions, new
accounting requirements, or delays or
inaccuracies in reporting. We continue to
implement internal risk management and
reporting procedures at Group and OpCo
levels to protect against risks of internal
control weaknesses and inadequate control
over financial reporting.
Our ability to provide unparalleled quality of
service to our customers and meet quality of
service (QoS) requirements depends on the
robustness and resilience of our network and
IT infrastructure and our ability to respond
appropriately to any disruptions. Our
telecommunications networks are subject to
risks of technical failures, aging infrastructure,
human error, wilful acts of destruction or
natural disasters. This can include equipment
failures, energy or fuel shortages, software
errors, damage to fibres, lack of redundancy
plans and inadequate disaster recovery plans.
How we mitigate this risk
1. Defined functional and leadership
development plans for the leadership and
critical roles within Airtel Africa
How we mitigate this risk
1. Ongoing review and strengthening of the
Group’s internal controls over financial
reporting and compliance processes
How we mitigate this risk
1. Implementing geographically redundant
disaster recovery sites for our networks
and IT infrastructure across our OpCos
2. Ongoing identification of high potential
employees for talent development
3. Long term incentive arrangements to
encourage employee retention and
alignment to long term company
objectives
2. Review process for addressing and
mitigating findings from internal audit, with
oversight from the Audit and Risk
Committee
2. Regular testing of fallback plans for
network and IT systems to ensure
reliability of switch over from active to
redundant nodes in the event of a disaster
3. Continually identifying and mitigating risks
10. Exchange rate
fluctuations and
11. Non-compliance to
legal and regulatory
availability of funds for
requirements
repatriation
Our multinational footprint means
we’re constantly exposed to the risk of
adverse currency fluctuations and the
We operate in diverse legal and regulatory
environments both in terms of the countries,
where we operate, and the regulators for
macroeconomic conditions in the markets
the services we provide. Establishing and
where we operate. We derive revenue and
maintaining adequate procedures, systems
incur costs in local currencies where we
and controls enables us to comply with our
operate, but we also incur costs in foreign
obligations in all the jurisdictions where we
currencies, mainly from buying equipment
operate and for the services we provide to our
and services from manufacturers and
customers. We are required to comply with
technology service providers. That means
Know Your Customer, anti-money laundering,
adverse movements in exchange rates
anti-bribery and corruption, sanctions, data
between the currencies in our OpCos and the
privacy, quality of service and other laws and
US dollar could have a negative effect on our
regulations. A failure to comply could lead
liquidity and financial condition. Furthermore,
to unanticipated regulatory penalties and
in some of our markets, triggered by broader
sanctions or tax levies, as well as damage
macroeconomic conditions, we are faced with
to our reputation.
instances of limited supply of foreign currency
within the local monetary system. This
constrains the ability to fully benefit at the
Group level from the strong cash generation
of those few OpCos.
How we mitigate this risk
How we mitigate this risk
1. Renegotiating Forex denominated
contracts to local currency contracts
2. Hedging foreign currency denominated
payables and loans, and matching assets
and liabilities, where possible
3. Availability of adequate funding
arrangements to mitigate any short-term
1. Instituting various policies across
the Group to comply with the legal
requirements in the jurisdictions where
we operate
2. Continuing engagement with regulators
and industry bodies on key policy matters
across our operating footprint
liquidity constraints caused by fluctuations
3. Implementing a regular compliance
in Forex supply within our OpCos
4. Geographical diversification allows us to
continue to access liquidity broadly across
our footprint
tracking process, identifying root causes
for cases of non-compliance and taking
corrective actions
4. Implementing an escalation process
for reporting significant matters to the
Group office
5. Communicating with and training
employees on relevant company policies
Link to strategy
Link to strategy
Basic building block for all strategic intent
Link to strategy
Link to strategy
Link to strategy
Basic building block for all strategic intent
Risk owner
Chief human resources officer
Risk owner
Chief financial officer
Risk owner
Chief technology officer
Chief information officer
Risk owner
Chief financial officer
Risk owner
Chief legal officer
Chief regulatory officer
76
Airtel Africa plc Annual Report and Accounts 2021
See our strategy on pages 24-31
© 2021 Friend Studio Ltd
File name: ManagingXourXrisk_v44
Modification Date: 25 May 2021 5:38 pm
Key to our strategic pillars Win with network Win with customers Win with data Win with mobile money Win with cost Win with peopleStrategic report
Financial risks
Governance and compliance risks
7. Leadership succession
8. Internal controls
planning
and compliance
9. Network resilience and
business continuity
We need to continually identify and develop
Gaps in our internal control and compliance
Our ability to provide unparalleled quality of
successors for key leadership positions
environment could affect our reputation and
service to our customers and meet quality of
across our organisation to ensure minimal
lead to financial losses. Our financial reporting
service (QoS) requirements depends on the
disruption to the execution of our corporate
is subject to the risk that controls may
robustness and resilience of our network and
strategy. Our ability to execute our business
become inadequate due to changes in
IT infrastructure and our ability to respond
strategies depends in large part on the efforts
internal or external conditions, new
appropriately to any disruptions. Our
of our key people. In some of the countries in
accounting requirements, or delays or
telecommunications networks are subject to
which we operate, there’s a shortage of skilled
inaccuracies in reporting. We continue to
risks of technical failures, aging infrastructure,
telecommunications professionals. Any failure
implement internal risk management and
human error, wilful acts of destruction or
to successfully recruit, train, integrate, retain
reporting procedures at Group and OpCo
natural disasters. This can include equipment
and motivate key skilled employees could
levels to protect against risks of internal
failures, energy or fuel shortages, software
control weaknesses and inadequate control
errors, damage to fibres, lack of redundancy
over financial reporting.
plans and inadequate disaster recovery plans.
have a material adverse effect on our
business, the results of our operations,
financial condition and prospects.
How we mitigate this risk
How we mitigate this risk
How we mitigate this risk
1. Defined functional and leadership
1. Ongoing review and strengthening of the
1. Implementing geographically redundant
development plans for the leadership and
Group’s internal controls over financial
critical roles within Airtel Africa
reporting and compliance processes
disaster recovery sites for our networks
and IT infrastructure across our OpCos
2. Ongoing identification of high potential
2. Review process for addressing and
2. Regular testing of fallback plans for
employees for talent development
mitigating findings from internal audit, with
network and IT systems to ensure
3. Long term incentive arrangements to
encourage employee retention and
alignment to long term company
objectives
oversight from the Audit and Risk
Committee
reliability of switch over from active to
redundant nodes in the event of a disaster
3. Continually identifying and mitigating risks
10. Exchange rate
fluctuations and
availability of funds for
repatriation
Our multinational footprint means
we’re constantly exposed to the risk of
adverse currency fluctuations and the
macroeconomic conditions in the markets
where we operate. We derive revenue and
incur costs in local currencies where we
operate, but we also incur costs in foreign
currencies, mainly from buying equipment
and services from manufacturers and
technology service providers. That means
adverse movements in exchange rates
between the currencies in our OpCos and the
US dollar could have a negative effect on our
liquidity and financial condition. Furthermore,
in some of our markets, triggered by broader
macroeconomic conditions, we are faced with
instances of limited supply of foreign currency
within the local monetary system. This
constrains the ability to fully benefit at the
Group level from the strong cash generation
of those few OpCos.
How we mitigate this risk
1. Renegotiating Forex denominated
contracts to local currency contracts
2. Hedging foreign currency denominated
payables and loans, and matching assets
and liabilities, where possible
3. Availability of adequate funding
arrangements to mitigate any short-term
liquidity constraints caused by fluctuations
in Forex supply within our OpCos
4. Geographical diversification allows us to
continue to access liquidity broadly across
our footprint
Link to strategy
Link to strategy
Link to strategy
Link to strategy
Basic building block for all strategic intent
11. Non-compliance to
legal and regulatory
requirements
We operate in diverse legal and regulatory
environments both in terms of the countries,
where we operate, and the regulators for
the services we provide. Establishing and
maintaining adequate procedures, systems
and controls enables us to comply with our
obligations in all the jurisdictions where we
operate and for the services we provide to our
customers. We are required to comply with
Know Your Customer, anti-money laundering,
anti-bribery and corruption, sanctions, data
privacy, quality of service and other laws and
regulations. A failure to comply could lead
to unanticipated regulatory penalties and
sanctions or tax levies, as well as damage
to our reputation.
How we mitigate this risk
1. Instituting various policies across
the Group to comply with the legal
requirements in the jurisdictions where
we operate
2. Continuing engagement with regulators
and industry bodies on key policy matters
across our operating footprint
3. Implementing a regular compliance
tracking process, identifying root causes
for cases of non-compliance and taking
corrective actions
4. Implementing an escalation process
for reporting significant matters to the
Group office
5. Communicating with and training
employees on relevant company policies
Link to strategy
Basic building block for all strategic intent
Risk owner
Chief human resources officer
Risk owner
Chief financial officer
Risk owner
Chief technology officer
Chief information officer
Risk owner
Chief financial officer
Risk owner
Chief legal officer
Chief regulatory officer
© 2021 Friend Studio Ltd
File name: ManagingXourXrisk_v44
Modification Date: 25 May 2021 5:38 pm
Airtel Africa plc Annual Report and Accounts 2021
77
Strategic report
Managing our risk continued
Changes in principal risks within the
financial year
Based on risk reviews conducted during the financial year, the
following changes occurred in the Group’s principal risks from the last
financial year:
Risk
Changes
Emerging risks
Post-Brexit regulatory environment: The UK and EU have
agreed on a deal for the UK’s exit from the EU. While the Group
does not anticipate any impact on its business as the Group’s
operating subsidiaries are located outside the UK and EU, the
Group is continuing to monitor changes in the post-Brexit legal
and regulatory environment.
Climate change: we continue to evaluate the potential impact
of climate change on our business operations and on the economies
in which we operate. The Group is progressing on its sustainability
initiatives and has outlined its broad ambition on pages 50-53 of
this report.
Compliance with legal and
regulatory requirements cuts
across all our strategic pillars
and is fundamental to the
Group achieving its objectives.
Peter Odedina
Chief compliance officer
Vendor governance
Debt facilities and
cross-guaranteed
debt
Know Your Customer
(KYC) and Quality of
Service (QoS)
non-compliance
This risk was removed as a principal risk
during the year. While the Group operates
an outsourced business model, adequate
progress has been made around our vendor
governance processes including minimising
the risks of over-reliance on particular
vendors.
This risk was removed as a principal risk
during the year. This risk relates to certain
debt notes issued by Bharti Airtel
International (Netherlands) B.V., a wholly-
owned subsidiary of the Group and
guaranteed by the Group’s majority
shareholder for which early repayment
could be triggered under certain conditions.
The Group has assessed the likelihood of
these events occurring as remote.
This risk was merged with the existing
Compliance to legal requirements risk and
renamed Non-compliance to legal and
regulatory requirements. There has been a
lot of recent focus from regulators on KYC
and QoS regulations in the markets where
we operate. Commensurate with the
increased risk level, the Group has
implemented adequate compliance
processes around our customer onboarding
process to ensure compliance with KYC
regulations and is also continually working
on improving the quality of service in our
operating markets. These risks still persist,
albeit with a lower risk rating, and they will
continue to be monitored as part of our
broader risk of non-compliance to legal and
regulatory requirements.
78
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: ManagingXourXrisk_v44
Modification Date: 25 May 2021 5:38 pm
Strategic report Our long-term viability statement
The preparation of this viability statement involved
the Board assessing the Group’s long-term
prospects and ability to meet future commitments
and liabilities as they fall due over the three-year
review period including the stress tests on various
scenarios to test the resilience and strength of
our forecasts.
Viability statement of Airtel Africa plc
In line with the UK Corporate Governance Code, the Board has
assessed our long-term strategic prospects, as well as the ability of
the Group to meet future commitments and liabilities as they fall due
within the assessment period.
The Group prepares a ten-year strategic business plan which is used
for long-term forecasting purposes (including strategic decisions such
as capital investment) and is aligned with the average life of our
regulatory licences and network assets and the potential opportunities
in the under-penetrated emerging African telecom sector. For the
purpose of our long-term viability assessment, the Board primarily
focuses on liquidity. The three-year period of our viability assessment
is in line with a three-year liquidity plan which matches the current
visibility of the tenure of our financing arrangements and also the
design and payout of the management incentive plan.
While the Board has no reason to believe that the Group will not be
viable over a longer period, given the inherent estimation uncertainty
involved in forecasting liquidity assumptions over a longer period, the
Board concluded that a three-year period provides a reasonable
degree of confidence while still retaining a longer-term perspective.
This plan has been prepared based on our strategy and adequate
stress tests have been conducted through various scenarios, both
individually and collectively, based on our overall risk assessment
framework.
The Covid-19 pandemic has contributed to a rapid acceleration of
already existing macro trends across the countries where we operate,
with people, businesses and governments seeking access to more and
better connectivity and improved financial inclusion. These challenging
times have shown that the telecoms industry is a key and essential
service for these economies, allowing customers to work remotely,
reduce their travel, keep connected and have access to affordable
entertainment and financial services.
Covid-19 presented significant challenges to the business, particularly
during the initial phase of the pandemic when mobile money and
services growth slowed. However, the actions taken by the Board in
the first quarter enabled the continued execution of our strategy,
including meeting increased customer demand for data, mobile money
and mobile services.
As a matter of prudence, we have given specific consideration to the
impact of Covid-19 on our cash flows with the stress tests performed,
including possible incremental revenue decline, an unanticipated
increase in costs, currency devaluation and availability of funds for
repatriation to the Group.
Further, notwithstanding the possible impacts of Covid-19, the Group
will continue to benefit from population growth and the need for
increased connectivity and financial inclusion in the medium to long
term in the countries where we operate.
Our detailed assessment of the possible impact of Covid-19 is
explained on pages 16-17 of the strategic report.
The company ended the year in a strong financial position. Free cash
flow increased by c.43% in the last 12 months to $647m and our net
debt to EBITDA ratio continued to improve to 2.0x at the end of this
Board’s assessment
Viability
The viability statement is
based on our current
business model (see page
22 of this report), a
three-year prospect
horizon, and our strategy
(see pages 24-31).
Principal risk
assessment
Our risk evaluation is
described on pages 72 to
78. While each principal
risk has been carefully
evaluated both individually
and collectively and an
adequate monitoring and
mitigation plan has been
defined, we have also
considered sensitivity
analysis and stress tests
on the three-year
projections.
Long-term plan and
headroom analysis
Our three-year plan has
been prepared considering
organic growth potential
in the geographies where
we operate.
Sensitivity
We have quantified the
impact of sensitivities on
cash and liquidity
headroom availability, both
individually and collectively,
in worst case scenarios. In
assessing the impact, we
have considered various
mitigating actions which
could be undertaken to
ensure sufficient liquidity.
Assessment of headroom based on forecast cash flows and
sensitivities to assess our ability to meet future commitments
and liabilities as they fall due over the next three years.
financial year. Our cash balances, in conjunction with nearly $1.14bn
of committed undrawn facilities at the date of approval of these
financial statements, ensure we can continue to meet our financial
obligations. We have $2.4bn in long-term bonds with the first
repayment of $879m (€750m) due in May 2021, which will be paid
through a mix of cash held as well as from the proceeds of a $500m
inaugural multi-bank long-term facility (part of the above mentioned
$1.14bn undrawn facilities) entered into by Airtel Africa plc in April
2021. Post this repayment, only $1.5bn of long-term bonds will remain
outstanding for the Group, with the next major bond repayment of
$505m (not due until March 2023). In recent months we have
announced several transactions to strengthen our balance sheet,
including asset monetisation through towerco sales, and bringing fresh
investment into our mobile money business amounting in aggregate to
c.$400m, with proceeds expected to be received in the next 12-18
months, which will further improve our financial position and continue
our deleveraging.
We have also concluded standalone credit rating assessments that
will enable us to further access debt capital markets, as and when
required.
Airtel Africa plc Annual Report and Accounts 2021
79
© 2021 Friend Studio Ltd
File name: ViabilityXstatement_v30
Modification Date: 26 May 2021 8:21 am
Strategic report Our long-term viability statement continued
The key risks considered in the stress tests keeping in mind the demographical and sectoral dynamics along with their potential negative impacts
are detailed here.
Stress tests done
Slowdown
in revenue
growth
Increase in
operating
expenses
Link to principal risks
and uncertainties
Description
• Adverse
competition
and market
disruption
• Technology
obsolescence
Revenue is projected on a number of assumptions such as subscriber base, rates and change in
average revenue per user. A change in any of the assumptions due to adverse competition and
market disruption may affect overall revenue growth. In most cases, changes in one such
assumption (e.g. in rates) are compensated either fully or marginally by a corresponding change in
other variables (e.g. subscriber base). Changes not fully compensated lead to a reduction in the rate
of revenue growth. We have modelled stress test scenarios for various levels of slowdown across
segments and revenue streams.
• Increase in cost
structure
With operations spread across 14 markets and each country having a different economic and
business environment, there is always a risk of operating costs increasing beyond projected levels.
Unanticipated
regulatory and
tax levies
• Non-compliance
to legal and
regulatory
requirements
As we work in diverse and dynamic legal environments, it’s necessary to establish and maintain
adequate procedures, systems and controls to ensure we comply with our obligations in all the
jurisdictions in which we operate. There will always be a risk of unanticipated regulatory and tax levies
affecting our profitability and therefore additional tax and regulatory levies have been considered in
the stress tests.
Exchange rate
fluctuation
Covid-19
impact
• Exchange rate
fluctuation and
availability of
foreign currency
for repatriation
to Group
• Uncertainties
arising out of the
Covid-19
pandemic
We are constantly exposed to the risk of adverse currency fluctuations, given our operations
in 14 different markets with different functional currencies. Furthermore, we could face low availability
of foreign currency in some of our markets constraining our ability to fully benefit at the Group level
from the strong cash generation of our local businesses.
We have stress tested the plan for various levels of currency devaluation across operating entities, including
the risk of availability of foreign exchange leading to repatriation of cash from operating entities to Group
holding companies and the resulting impact on cash flows and liquidity headroom at a Group level.
The Covid-19 pandemic has contributed to a rapid acceleration of already existing macro trends
across the countries where we operate, with people, businesses and governments seeking access to
more and better connectivity and improved financial inclusion. It is in these challenging times that the
telecoms industry has emerged as a key and essential service for these economies, allowing
customers to work remotely, reduce their travel, keep connected and allow access to affordable
entertainment and financial services.
This has resulted in robust growth in all revenue streams for most of the telecom operators.
We, on our part, have continued to work with governments, regulators, partners and suppliers
to keep customers and businesses connected as well as supporting the economies and
communities. We focused on expanding and maintaining our network to ensure it could cope with
increasing demand, we kept our distribution up and running by increasing the penetration of digital
recharges and stock levels, and we expanded our home broadband solutions to ensure customers
could work and access entertainment remotely. Our detailed assessment of possible impact of
Covid-19 is provided on pages 16-17 of this report.
We have carried out extensive scenario analysis looking at the possible negative effect of the
outbreak on the business via a possible reduction in revenue growth and a possible increase in
operating expenses.
Conclusion
The results of stress-testing our forecasts over the three-year period
for the above sensitivities, including the possible impact of Covid-19,
demonstrate that the Group will be able to withstand these impacts
over the period of its financial forecasts. The Board has a reasonable
expectation that no single or plausible combination of events would
affect long-term viability, even under the severe stress tests and the
Group would be able to continue operating and meet its liabilities over
the three-year period.
In order to reach this conclusion, the Board has considered:
• Possible actions to mitigate the impact of risks in the severe stress
tests, including limiting or delaying discretionary capital expenditure
without compromising on network quality, optimising operating
expenditure and reducing or stopping dividend payments
• Accessing additional funding, including financing facilities and
access to the debt capital markets in order to repay debt which
matures over the three-year period while maintaining adequate
liquidity headroom
• The proceeds from the Group’s asset monetisation programme
related to tower assets and investments in mobile money business
which have been announced during the financial year 2020/21
80
Airtel Africa plc Annual Report and Accounts 2021
• The internal and external environment, current and long-term
prospects, and the strategic intents and directions adopted by
management
• The risk framework, potential sensitivities around the principal risks
and mitigating factors
The Board has concluded that the Group would be in a position to
access debt capital markets and meet our financing needs, as and
when required.
Based on this assessment and in accordance with requirements of
paragraph 31 of the 2018 UK Corporate Governance Code, the Board
has concluded that we have the ability to continue our operations and
be able to meet our commitments and liabilities over the assessment
period.
The strategic report was approved by the Board of directors on
11 May 2021 and signed on its behalf by:
Raghunath Mandava
Chief executive officer
11 May 2021
© 2021 Friend Studio Ltd
File name: ViabilityXstatement_v30
Modification Date: 26 May 2021 8:21 am
Strategic report Governance
report
In this section
82 Our Board of directors
86 Our Executive Committee
88 Chair’s introduction
90 Our leadership
97
100 Audit and Risk Committee report
110 Nominations Committee report
115 Our compliance with the
Board evaluation
UK Corporate Governance Code
119 Directors’ report
123 Directors’ responsibilities statement
124 Directors’ remuneration report
© 2021 Friend Studio Ltd
File name: BoardXandXExecXCommittee_v48
Modification Date: 26 May 2021 8:22 am
Airtel Africa plc Annual Report and Accounts 2021
81
Our Board of directors
Sunil Bharti Mittal
Chair
N
Date appointed to Board: October 2018
Independent: no
Age: 63
Nationality: Indian
Skills, expertise and contribution
Sunil is the founder and chairman of Bharti Enterprises, one of India’s leading
conglomerates with diversified interests in telecoms, insurance, real estate,
agriculture and food, renewable energy and other ventures. Bharti Airtel, the flagship
company of Bharti Enterprises, is a global telecommunications company operating in
18 countries across South Asia and Africa. It’s one of the top three mobile operators
globally, with a network covering over two billion people. Airtel is India’s largest
integrated telecoms provider and the second largest mobile operator in Africa.
Sunil is the pioneering force behind the mobile revolution in India – he revolutionised
the business model at Bharti Airtel to make affordable voice and data services
available to all. Airtel has transformed the quality of lives of millions of people globally,
providing connectivity and digital empowerment. As chair of the Board, his leadership
has brought immense value to Airtel Africa through his vision, knowledge and deep
expertise.
External commitments
• Founder and chairman of Bharti Enterprises and Bharti Airtel
• Chairman of OneWeb Holding Limited
• Member of the International Business Council, World Economic Forum (WEF)
• Member of the Global Board of Advisors, Council of Foreign Relations (CFR)
• Commissioner of the Broadband Commission
• Trustee at the Carnegie Endowment for International Peace (CEIP)
• Member of the Board of Qatar Foundation Endowment (QFE)
• Member of the India-US, India-UK and India-Japan and India-Sweden CEO Forums
• Co-chair of the India-Africa Business Council
Previous roles
Sunil has served on the boards of several international bodies. He was the chairman
of the International Chamber of Commerce (ICC) from June 2016 to June 2018 and
the chairman of GSM Association (GSMA) from January 2017 to December 2018.
He was the president of the Confederation of Indian Industry (CII) from 2007 to
2008. Sunil is closely associated with spearheading the Indian industry’s global trade,
collaboration and policy – he has served on the Prime Minister of India’s Council on
Trade and Industry.
Sunil has also served on the boards of several multinational companies including
Unilever PLC, Standard Chartered Bank PLC and SoftBank Corp.
Sunil is a nominee of Bharti Airtel Limited.
Raghunath Mandava
Chief executive officer
M
Date appointed to Board: July 2018
Independent: no
Age: 54
Nationality: Indian
Skills, expertise and contribution
Raghu has held a variety of sales, marketing, customer experience and general
management roles in the FMCG and telecoms industries. Raghu joined Airtel Africa
Group as chief operating officer in 2016 and took over as CEO in January 2017.
To his role as CEO, he brings a deep understanding of telecoms and a strong belief
that connectivity can accelerate growth by helping to bridge the digital divide and
advance financial inclusion. Raghu takes an innovative problem-solving approach to
achieve disruptive growth and profitability. He has guided Airtel Africa in building a
modernised 4G network. In his last role in Airtel India, he helped deliver a substantially
improved customer experience while considerably reducing costs. He has an
electronics engineering degree and an MBA specialising in marketing.
Other commitments
Board member of Bharti Airtel International (Netherlands) B.V., Bharti Airtel Africa B.V.
and Airtel Networks Limited.
Previous roles
Raghu represented the Airtel Africa Group on the Board of Bharti Airtel until January
2019. He held various roles at Airtel India starting in 2003 as chief operating officer
for Tamil Nadu, Circle CEO for Rajasthan, chief marketing officer of the Mobile
Business, regional operations director for East India Mobile Business, regional
operations director for B2C Business for West India, and customer experience
director for India. Before joining Airtel India, Raghu held various sales, marketing and
business operations roles at Hindustan Unilever.
During the reporting period, Raghu participated in a targeted mentoring programme
to enhance his UK listed plc experience.
Andrew Green CBE
Senior non-executive director
AR N M
Date appointed to Board: April 2019
Independent: yes
Age: 65
Nationality: British
Skills, expertise and contribution
Andy brings many years of global financial and strategic experience to the Board.
Through his work with a number of multinational organisations, he is able to draw on
a wide knowledge of diverse issues and outcomes to provide constructive challenge
and robust scrutiny of matters that come before the Board.
External commitments
• Group chairman of Simon Midco Limited (the holding company of Lowell Group)
• Chair at Gentrack Group Limited (NZX/ASK)
• Non-executive director at Link Administration Holdings Limited
• Commissioner at the National Infrastructure Commission
• Trustee of WWF UK and Disasters Emergency Committee
• Chair of Water Aid UK
Previous roles
Andy was previously senior independent director of Avanti Communications plc and
ARM Holdings plc and chairman of Digital Catapult and IG Group plc. He was Group
chief executive officer of Logica plc until its sale in 2012. His prior roles include those
at BT Group plc, including CEO of BT Openworld, CEO of BT Global Services and CEO
of Group Strategy and Operations and various roles at Shell and Deloitte. Andy has
held a number of non-executive directorships in the US, Hong Kong, Germany and
the UK.
82
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: BoardXandXExecXCommittee_v48
Modification Date: 26 May 2021 8:22 am
Key to committeesAR Audit and Risk CommitteeN Nominations CommitteeR Remuneration CommitteeM Market Disclosure Committee Committee chairGovernance report Awuneba Ajumogobia
(née Iketubosin)
Non-executive director
R AR
Date appointed to Board: April 2019
Independent: yes
Age: 62
Nationality: Nigerian
Skills, expertise and contribution
Awuneba is a chartered accountant with broad experience in assurance, taxation,
finance and advisory services across several industries. Her expertise as an
assurance and finance specialist, garnered at leading professional services firms and
her knowledge and experience of the Nigerian and African markets make her
instrumental to Board decision-making.
External commitments
• Executive director at Multistream Energy Limited
• Board chair at CAP Plc
• Governing council chair at Grange School, Lagos
• Board member of University of Ibadan Research Foundation
• Member of the Finance Committee of the Musical Society of Nigeria (MUSON)
• Executive council member of Women in Management, Business and Public Service
(WIMBIZ)
Previous roles
Awuneba was a board member at UAC of Nigeria PLC (UACN) from 2009 to 2019.
During her tenure, she chaired the Risk Management Committee and was a member
of the Statutory Audit Committee. Prior to this, she developed her career at Peat
Marwick, Deloitte and Accenture. Awuneba has also held advisory and
implementation roles with a number of national development projects in Nigeria.
Douglas Baillie
Non-executive director and
chair of Remuneration Committee
N R M
Date appointed to Board: April 2019
Independent: yes
Age: 65
Nationality: British
Skills, expertise and contribution
Doug brings vast leadership experience in both private and public sectors to the
Board and his role as the chair of the Remuneration Committee. His background in
diverse leadership roles and human resources is particularly useful to the Board
when considering the Airtel Africa culture, employee management, executive
remuneration and other employee-related activities.
External commitments
• Vice chairman of the MasterCard Foundation
• Director of the Leverhulme Trust
• Non-executive director of the Huhtamaki Group
Previous roles
Doug spent 38 years at Unilever, where his roles included president of Western
Europe in the Netherlands until 2011, Group vice president of South Asia, CEO
Hindustan Unilever in India until 2008, Group vice president Africa and the Middle
East from 2004 until 2006, and Chief HR officer from 2011 until 2016.
John Danilovich
Non-executive director
R
Date appointed to Board: April 2019
Independent: yes
Age: 70
Nationality: American
Skills, expertise and contribution
John has held executive leadership roles in international business and government
for several decades. As a global business leader and distinguished diplomat, he has
extensive experience in regional and international trade-related issues. To Airtel
Africa, he brings skills in building international partnerships and advocacy with
policymakers, foreign dignitaries and business leaders, and provides constructive
challenge and robust scrutiny of matters that come before the Board.
External commitments
• Board member at d’Amico International Shipping (DIS)
• Board and council member at the Harvard Chan School of Public Health, the Center
for Strategic International Studies (CSIS) and Chatham House (UK)
• Member of the Council on Foreign Relations (New York) and of the American
Academy of Diplomacy
Previous roles
John was Secretary General of the International Chamber of Commerce (ICC) in
Paris from 2014 to 2018 and CEO of the Millennium Challenge Corporation in
Washington from 2005 to 2009. He has been the US ambassador to Brazil and to
Costa Rica. While on the board of the Panama Canal Commission, he acted as
chairman of the commission’s Transition Committee prior to the handover of the
canal by the US to Panama. In his distinguished career, he also played a significant
role in the Central American Free Trade Agreement (CAFTA).
Annika Poutiainen
Non-executive director
AR
Date appointed to Board: April 2019
Independent: yes
Age: 50
Nationality: Finnish
Skills, expertise and contribution
Annika’s wide-ranging experience in audit and regulatory engagements contributes
to her performance as a member of the Board and Audit and Risk Committee. With
her legal background and deep knowledge of auditing, accounting and financial
reporting, she brings a keen scrutiny to all governance and regulatory matters.
External commitments
• Working chair of the Council for Swedish Financial Reporting Supervision
• Member of the Swedish Audit Academy
• Member of the Nasdaq Helsinki Listing Committee
• Board member of the Carpe Diem Foundation, which runs the top-ranked Swedish
elementary school, Fredrikshovs Slott Skola
Previous roles
Annika has been a board and audit committee member of listed companies eQ Abp,
Hoist Finance AB, Saferoad AS (delisted in September 2018) and Swedbank AB, as
well as industry advisor to strategic communications firm JKL Group. She advised
the Swedish government on the national implementation of the reformed EU market
abuse regime and was head of market surveillance Nordics at Nasdaq and head of
unit, prospectuses, exchanges and clearing houses at the Swedish Financial
Supervisory Authority. She was also an associate in the Capital Markets Group at
Linklaters London and has been a practising solicitor in both the UK and Finland.
© 2021 Friend Studio Ltd
File name: BoardXandXExecXCommittee_v48
Modification Date: 26 May 2021 8:22 am
Airtel Africa plc Annual Report and Accounts 2021
83
Governance report Our Board of directors continued
Ravi Rajagopal
Non-executive director and
chair of Audit and Risk Committee
AR N M
Date appointed to Board: April 2019
Independent: yes
Age: 65
Nationality: British
Skills, expertise and contribution
With experience in diverse industries such as healthcare and consumer brands, Ravi
brings a wealth of recent and relevant financial experience and cultural insight to our
Board and committees.
External commitments
• Chairman of Fortis Healthcare Limited, India
•
Independent director and chair of the Audit Committee of Vedanta Resources
Limited, UK
• Chairman of JM Financial, Singapore Pte Ltd
• Trustee of the Science Museum Foundation (UK)
Previous roles
Ravi held financial leadership roles at Diageo until retiring in 2015, including group
controller in the UK with responsibility for the spirits business across sub-Saharan
Africa and global head of mergers and acquisitions. Starting in 1979, Ravi held
various roles at ITC India, including a secondment to West Africa with BAT plc. He has
held numerous positions on various joint venture boards and Diageo’s India advisory
board, and was non-executive director of United Spirits in India.
Kelly Bayer Rosmarin
Non-executive director
Date appointed to Board: October 2020
Independent: no
Age: 44
Nationality: Australian
Skills, expertise and contribution
Kelly brings to the Board a unique blend of technology, commercial and management
expertise from a career spanning financial services, management consulting and the
Silicon Valley tech sector. She also brings a valuable acumen in leadership, banking,
risk management, regulated markets and innovation at scale. Kelly has an impressive
track record of delivering results, and operating and growing large global businesses.
She is also known for her expertise in leveraging technology, data and analytics to
develop leading customer services and experience.
In 2015, Kelly was named one of the Top 25 Women in Asia Pacific Finance, the Top
10 Businesswomen in Australia, and 50 Most Powerful Women in Australian
Business. She is a nominee of Singtel to our Board.
External commitments
• CEO at Singtel Optus Pty Limited and member of the Singtel Management
Committee
• Non-executive director at Openpay Group Ltd
• Member of Chief Executive Women
Previous roles
Kelly has held a variety of executive roles, including Group Executive, Institutional
Banking and Markets on the Executive Team of the Commonwealth Bank
of Australia. Her career began in Silicon Valley with both start-ups and established
software companies working in product development, business development,
marketing, M&A and strategy. After a stint as a management consultant with the
Boston Consulting Group, Kelly joined Commonwealth Bank in 2004 and held a
variety of senior roles across the Institutional and Business Banking divisions, before
being appointed to the Bank’s Executive in 2013.
Kelly has previously been a board member at the Football Federation of Australia
(FFA) and served on the University of New South Wales Engineering Faculty
Advisory Board, the Australian government’s FinTech Advisory Group and NSW
Government Digital Advisory Panel.
Akhil Gupta
Non-executive director
Date appointed to Board: October 2018
Independent: no
Age: 65
Nationality: Indian
Skills, expertise and contribution
Akhil brings vast financial, strategic and telecoms expertise to our Board. He has
played a pivotal role in the Bharti Group’s phenomenal growth in the telecoms sector,
both organically and through various acquisitions. His innovative thought leadership
has helped Bharti Airtel achieve healthy margins while offering some of the lowest
tariffs in the world.
External commitments
• Vice chairman of Bharti Enterprises
• Chairman of Tower and Infrastructure Providers Association (TAIPA)
• President of Telecom Sector Skill Council (TSSC)
Previous roles
Akhil led the formation of various partnerships for Bharti with operators like British
Telecom, Telecom Italia, Singapore Telecom and Vodafone, as well as with financial
investors such as Warburg Pincus, Temasek, KKR, Qatar Foundation Endowment, AIF
and Sequoia. He was behind the separation of passive mobile infrastructure and the
formation of one of the largest tower companies in the world – a notable example of
collaborating at the back end while competing at the front end. He also executed the
acquisition of Zain Group’s mobile operations in 15 countries across Africa, the
second largest outbound deal by an Indian company.
Akhil is a nominee of Bharti Airtel Limited.
Shravin Bharti Mittal
Non-executive director
Date appointed to Board: October 2018
Independent: no
Age: 33
Nationality: British
Skills, expertise and contribution
As our youngest Board member and the entrepreneurial founder of a top-performing
global technology investment firm, Shravin brings a diversity of view and expertise in
the tech sector to our discussions and decision-making.
External commitments
• Founder of Unbound, a long-term investment firm aiming to build and back
technology companies
• Managing director of Bharti Global Limited
• Board member of Oneweb Holdings Limited
• On the Board of Softbank Energy
• Board member of technology companies mPharma, Cars24, Syfe, Paack and
FreightHub
Previous experience
Shravin was previously at SoftBank Vision Fund, a $100 billion fund investing in
technology companies, and assistant director at Better Capital, a private equity firm
in London where he turned around distressed retail and manufacturing businesses.
Before this, he was involved in the launch of 3G at Airtel India and on the senior
management team at Airtel Africa, where he spearheaded the post-acquisition
integration of Zain. And before Airtel, he worked with J.P. Morgan investment bank
covering technology, media and telecoms.
Shravin is a nominee of Bharti Airtel Limited.
84
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: BoardXandXExecXCommittee_v48
Modification Date: 26 May 2021 8:22 am
Key to committeesAR Audit and Risk CommitteeN Nominations CommitteeR Remuneration CommitteeM Market Disclosure Committee Committee chairGovernance report Board age (years)
Board nationality
Board gender ratio
20–40
9%
40–50
9%
Finnish
9%
Nigerian
9%
British
37%
Women
27%
60–70
64%
50–60
18%
American
9%
Australian
9%
Men
73%
Indian
27%
Board skills
Sectorial experience
Telecoms
Digital/Fintech/Consumer electronics
Functional experience
Strategy
Risk management
Finance/Audit
International finance/Capital markets/M&A
Customer experience
Other
Human resources
Regulation
UK listed board experience
Other listed board experience
© 2021 Friend Studio Ltd
File name: BoardXandXExecXCommittee_v48
Modification Date: 26 May 2021 8:22 am
Airtel Africa plc Annual Report and Accounts 2021
85
Core compentency Secondary compentency Tertiary/Not an apparent compentencyGovernance report Our Executive Committee
Chief executive officer
Chief financial officer
Regional directors
Business heads
Functional chiefs
Raghu Mandava
Jaideep Paul
Segun Ogunsanya
MD and CEO Nigeria
Ian Ferrao
Regional director
East Africa
Michael Foley
Regional director
Francophone Africa
Vimal Kumar Ambat
CEO, Airtel Money
Luc Serviant
Group enterprise director
Ramakrishna Lella
Chief supply chain officer
Daddy Mukadi
Chief regulatory officer
Stephen Nthenge
Head of internal audit
and risk assurance
Olivier Pognon
Chief legal officer
Rogany Ramiah
Chief human resources
officer
Neelesh Singh
Chief information officer
Razvan Ungureanu
Chief technology officer
Ian Ferrao
Regional director, East Africa
Ian is responsible for managing our East Africa financial
performance and accelerating profitable growth.
He works with local MDs in each market to develop
strategy and execution plans, helps develop local
leadership teams and improves the coordination
between Group level and teams in local operating units.
Ian has spent the last 15 years leading telecoms
organisations in Africa, both as an entrepreneur and
a corporate CEO. He joined Airtel Africa in 2019 to
lead our East Africa business segment, comprising
Airtel operations in Kenya, Tanzania, Uganda, Rwanda,
Zambia and Malawi. Before Airtel Africa, Ian was the
CEO for Vodacom Tanzania PLC, where he led the
company’s IPO onto the DSE. He has also served as
CEO of Vodacom Lesotho, CCO for Vodacom Business
Africa and commercial director and shareholder of
AfriConnect Zambia.
Michael Foley
Regional director, Francophone
Africa
Michael has been an ExCo member since joining Airtel
Africa in 2020. He is responsible for managing financial
performance and accelerating profitable growth in
our Francophone Africa operations. Michael works
with local MDs in each market to develop strategy
and execution plans, helps develop local leadership
teams, and improves the coordination between
Group level and teams in local operating units.
Over the last 35 years, Michael has led telecoms,
consumer goods, fintech and gaming businesses
in the US, Asia and Africa, as well as in his native
Canada. His most recent role was as CEO of Telenor’s
operations in Pakistan, Bulgaria and Bangladesh.
Business heads
Vimal Kumar Ambat
CEO, Airtel Money
Vimal is the newest member of our ExCo, having
joined Airtel Africa in 2021. He’s responsible for
leading our Airtel Money business – managing
its financial performance, strategic direction,
brand strength and growth in customers.
To Airtel Africa, he brings over 25 years of banking
leadership experience in Asia, the Middle East and
Africa. Immediately before joining Airtel Africa, Vimal
was the chief executive, Retail and Business Banking
and chief digital officer for Absa Group Regional
Operations.
Luc Serviant
Group enterprise director
Luc leads our enterprise business strategy. This
includes helping SMEs, corporate and government
customers across Africa adopt fixed and mobile
network solutions to accelerate their growth, digital
transformation and business productivity.
Luc has more than 25 years’ international experience
in marketing and implementing core network and ICT
solutions for the enterprise sector. He has held various
roles at Orange Business Services – from head of
global services in Switzerland to head of consulting
and solutions integration APAC in Singapore, and
most recently as vice president Middle East and Africa,
based in Dubai. He has also held a variety of positions
at SITA (Société Internationale de Télécommunications
Aéronautiques), Global One Telecommunications and
Alcatel-Lucent.
Luc has been an ExCo member since joining Airtel
Africa in 2019.
Chief financial officer
Jaideep Paul
Chief financial officer
Jaideep brings more than 30 years of leadership and
financial experience to our committee, with 18 of those
in the telecoms industry. Before becoming our chief
financial officer in 2014, he was CFO at Airtel Nigeria,
Fairtrade LLC Muscat and Bharti Retail. He held prior
financial roles at Mumbai Circle and Bharti Airtel Delhi
Circle, as well as senior roles at HCL, Telstra V-Com and
Caltex. Jaideep started his career at Pricewaterhouse
and is a qualified chartered accountant.
Jaideep attends all Board meetings, Audit and
Risk Committee meetings and chairs our Finance
Committee. He’s also participating in a targeted
mentoring programme to enhance his UK listed plc
experience.
It has been announced that Jaideep will be
appointed an executive director and join the Board
of Airtel Africa plc with effect from 1 June 2021.
Regional directors
Segun Ogunsanya
Managing director and CEO, Nigeria
Segun is responsible for the overall management of
our operations in Nigeria, our largest market in Africa.
He drives the execution of our strategy in Nigeria in line
with Group-level functional teams.
Segun has more than 25 years’ business management
experience in banking, consumer goods and telecoms.
Before joining Airtel in 2013, Segun held leadership
roles at Coca-Cola in Ghana, Nigeria and Kenya (as
CEO). He has also been the managing director of
Nigerian Bottling Company Ltd (Coca-Cola Hellenic
owned) and Group head of retail banking operations
at Ecobank Transnational Inc, covering 28 countries
in Africa. Segun is a chartered accountant.
It has been announced that Segun will be appointed
Chief executive officer and join the Board of Airtel
Africa plc with effect from 1 October 2021.
86
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: BoardXandXExecXCommittee_v48
Modification Date: 26 May 2021 8:22 am
Governance report Ramakrishna Lella
Chief supply chain officer
Rama oversees our procurement of IT and network
equipment, management of tower companies and
bandwidth, sales and distribution, supply chain
marketing and HR services, and warehouse operations
and logistics. He also leads on our cost reduction
initiatives.
Ramakrishna has spent more than 30 years in the
telecoms industry, with more than half of this time at
Airtel. Before becoming our chief supply chain officer
in 2016, he led the team setting up various types
of networks (including mobile, NLD/ILD, Enterprise
and DTH) and was the director of supply chain
management for Airtel Nigeria. He has also held
different roles in the telecoms sector covering research
and development, manufacturing (Alcatel and Indian
telephone industries) and telecom service providers
(Airtel and Reliance Jio).
Daddy Mukadi
Chief regulatory officer
Daddy is responsible for our regulatory and
government relations strategy across all 14 operations.
This includes obtaining all necessary resources
(licence, spectrum), ensuring full compliance and
actively helping to shape the sector’s policy and
regulatory landscape towards best practice.
Before becoming our chief regulatory officer in 2015,
Daddy held several legal and regulatory leadership
roles across Africa. His most recent role was as
executive head of international regulatory affairs
and executive head of international commercial
legal affairs at Vodacom Group.
With a master’s degree in communications law and as
the author of a handbook for media law practitioners,
Daddy brings a broad understanding of legal and
regulatory affairs to his role at Airtel Africa.
Functional chiefs
Stephen Nthenge
Head of internal audit and
risk assurance
Stephen is responsible for our internal audit
department, which provides independent auditing
and advice on our risk management, governance
and control processes in line with the purpose, role
and responsibilities in the Audit Charter. He also
oversees the integrity and reliability of our financial
and operational information, the safeguarding of the
company’s assets, and our compliance with laws,
regulations, policies and procedures.
Stephen has more than 25 years’ experience in audit,
enterprise risk and information security management,
having worked for Deutsche Bank AG, JPMorgan
Chase and KPMG in senior management roles in
Australia, Singapore, London and New York. In addition
to leading regional and global audit teams, he helped
to establish risk and governance frameworks for
new products and services as well as regulatory
governance frameworks. He has also led strategic
risk mitigation and transformational programmes.
Stephen is a certified information systems auditor.
Stephen has been an ExCo member since joining
Airtel Africa in 2019.
Olivier Pognon
Chief legal officer
Olivier leads the operational oversight and legal
compliance of Airtel Africa’s operations. This includes
litigation management, contract negotiation, corporate
governance and the compliance of our M&A activities.
Before joining Airtel Africa in 2014, Olivier worked as
senior legal counsel at MTN Group in Johannesburg.
He has also held roles in corporate law and project
finance at Agence Française de Développement,
CMS BFL and Mayer Brown in Paris. With postgraduate
degrees in business law, project and structured finance
and executive education in finance, Olivier brings his
sharp legal acumen to our affairs at Airtel Africa.
Rogany Ramiah
Chief human resources officer
Rogany is responsible for leading and developing
our people strategy to support our overall strategic
direction. Her main areas of focus are succession and
talent planning, change and performance management
and enhancing our overall employee experience.
Rogany has 24 years’ experience in retail, media and
consulting, including as senior director with Walmart’s
International People Division and as an executive in
Massmart (a division of Walmart). To her role as CHRO,
she brings global expertise in supporting businesses
on strategy, cultural transformation, business process
re-engineering and organisational redesign. She also
has experience in talent acquisition, talent planning,
remuneration strategy, and developing and leading
HR transformations.
Rogany has been an ExCo member since joining
Airtel Africa in 2019.
Neelesh Singh
Chief information officer
Neelesh defines and implements the IT strategy across
our business, including in our operating subsidiaries in
14 countries. He specialises in building and revamping
operating models, delivering on complex business
transformations, setting up greenfield operations,
cloud infrastructure and architecture simplification.
He brings 20 years of international experience in
IT across the public sector, independent software
vendors and communications service providers to his
role at Airtel Africa. Before joining Airtel Africa in 2017,
he held a senior IT leadership role at the Telenor group,
handling various aspects of IT across 13 countries in
Scandinavia, Central and Eastern Europe and Asia.
Razvan Ungureanu
Chief technology officer
Razvan leads on our technology strategy and the
delivery of this to the network leadership in each of our
14 markets. He focuses on strategic network thinking,
design, rollout and the quality of our ongoing technical
operations.
Razvan has 28 years’ experience in telecoms and has
worked in Romania, Belgium, Luxembourg and the
Dominican Republic. Before joining Airtel Africa in 2016,
he was chief technology and information officer for
Digicel, with responsibility for 29 countries in the
Caribbean and Central America.
© 2021 Friend Studio Ltd
File name: BoardXandXExecXCommittee_v48
Modification Date: 26 May 2021 8:22 am
Airtel Africa plc Annual Report and Accounts 2021
87
Governance report Chair’s introduction
Acting with purpose,
underpinned by
strong governance
This has been an
unprecedented year in
many ways. I would like
to begin this statement
by saying once again how
proud I am of Airtel Africa’s
people for the resilient
approach they have taken
to providing our customers
with essential services
despite the challenges of
the Covid-19 pandemic.
I say more about their contribution to their communities and to the
performance of our business in my introduction on pages 8-9. Their
efforts show our purpose, values and culture in action – transforming
lives through a can-do attitude, entrepreneurial spirit and innovation.
As a Board, we recognise that we have more to do to measure and
report on the processes by which our culture and purpose are
embedded across Airtel Africa, which will continue to be a focus for us
in the next year. At the same time, we’re confident that our employees
are showing what our values mean on the ground, not least in the way
they were able to anticipate, adapt and deliver solutions that enrich the
lives of the communities we serve.
Our commitment to continuous
improvement and strong
governance underpins our
ability to deliver solutions
that enrich the lives of the
customers and communities
we serve.
Sunil Bharti Mittal
Chair
88
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: ChairmansXIntroduction_v24
Modification Date: 25 May 2021 5:51 pm
Governance report An effective Board, with a focus
on improvement
Our second independent board evaluation confirmed that our Board
functions effectively. It is well balanced and diverse, with a strong mix
of relevant skills and experience. This evaluation took place in the
context of a pandemic, where Board members were unable to meet
in person. It was good to see positive ratings around the effectiveness
of our virtual meetings, as well as the relationships and dynamics of
the Board.
With the help of the company secretary, I’ve drawn up a list of action
points for the Board – these include a more sustained focus on
business and strategic issues, continuing to improve our engagement
with stakeholders, and developing our knowledge of regional markets.
The Board will also keep its composition under review, with a view to
bolstering the Group’s technology expertise. Related to this will be a
cybersecurity deep-dive exercise conducted by our Audit and Risk
Committee.
While our Board is diverse, and inclusivity is one of the values of
our business, we recognise that we have more to do to embed our
diversity and inclusion processes at all levels. This work aligns with
our new sustainability ambition, which is discussed on page 50 and
outlines our approach to climate change as a strategic issue and our
assessment of its potential impact on us and our stakeholders. Later
this year we will announce a full set of targets and metrics to support
this strategy, which has full support from the Board as a reflection of
our focus on ESG issues generally and our purpose of transforming
lives in particular.
I’m grateful to all the members of the Board for their individual
contributions, and particularly to the chairs of each committee
for establishing and steering their committees during the year.
The Audit and Risk, Remuneration and Nominations Committee
chairs have provided their own reports on their committees’ activities.
In conclusion
I’m confident that your Board is effective and works well. We have
the right balance of skills, expertise and professionalism to continue
to deliver strong governance, while allowing the CEO and CFO to
implement and deliver our strategy. While I’m pleased with the Board’s
activities and approach when it comes to corporate governance, we
continually look for ways to learn and improve.
I very much look forward to meeting with shareholders at the AGM
on Thursday 15 July 2021, which will be livestreamed from London.
Along with all your directors (who intend to be at the AGM), I’m
available to respond to your questions, concerns and suggestions
at any time.
Sunil Bharti Mittal
Chair
11 May 2021
Embedding our approach,
listening to stakeholders
We know that both our short- and long-term performance must be
built on a strong and appropriate governance structure. Alongside
the Board’s focus on making sure our business has the appropriate
structure and quality of capital, debt and liquidity, described by our
chief financial officer on page 60, we have embraced the rigorous
requirements of listing in London and Lagos as part of our
commitment to strong governance and transparent reporting.
As part of embedding that approach, both the Board and our
employees have been through a robust compliance training
programme. The Board receives regular briefings and updates on
corporate governance at Board and committee meetings, and has
taken steps to ensure that legal and regulatory obligations become
part of our culture and decision-making processes. For example, the
directors’ duties under section 172 of the Companies Act 2006 help
to underpin the good governance at the heart of how we work.
We have improved our disclosure and provided better evidence on
how we engage with our stakeholders, the oversight of the Board,
and how feedback is considered. Details of how the Board considers
shareholder and wider stakeholder interests when making decisions
and strategic planning are set out on pages 32-37. Our two areas of
non-compliance with the 2018 UK Corporate Governance Code are
discussed on page 91.
Governance highlights for the year ended 31 March 2021
• We have improved our compliance with the
requirements of the UK Corporate Governance
Code applying to Airtel Africa for 2020/21. Our
position on executive director shareholdings is now
compliant and is explained on page 91. We remain
non-compliant with Provision 9, non-independence
of our chair on appointment, and Provision 41, our
Remuneration Committee’s engagement with
our workforce – and our position is explained on
page 91.
• The Board developed its ambition for being more
sustainable. Our plans to implement and execute this
ambition are explained on page 50.
• We have applied and improved our business model
and continued with our strategic ambition to
transform lives through greater financial inclusion
and empowerment across the African continent by
rolling out reliable network, providing affordable data
and serving our customers – see page 22 for our
business model and see page 24 for our strategy.
• We reviewed the membership of our committees
and welcomed Kelly Bayer Rosmarin to our Board.
• We developed our strategy for improving diversity
and inclusion at all levels of our business – see
page 57.
• We enhanced our succession and contingency
planning processes – see page 112.
• We conducted a comprehensive, externally
facilitated Board evaluation – see page 97.
© 2021 Friend Studio Ltd
File name: ChairmansXIntroduction_v24
Modification Date: 25 May 2021 5:51 pm
Airtel Africa plc Annual Report and Accounts 2021
89
Governance report Our leadership
Our governance structure
Our Board of directors is the primary decision-maker at Airtel Africa.
Its members are responsible for our operational and financial
performance, for setting our strategy and for making sure we manage
risk effectively. See pages 82-84 for details of our Board members.
Board committees
The Board delegates certain responsibilities to specialist committees
while maintaining overall accountability. We have four main
governance committees: Audit and Risk, Remuneration, Nominations
and Market Disclosure. Each committee has written terms of reference
which are available to view on our website: www.airtel.africa
Governance committees
Other committees
Board
The Board also delegates certain
responsibilities to our Finance Committee
and Share Scheme Committee
Finance Committee
• Approves funding and other
financial matters in line with
our delegated authorities or
as requested by the Board
• Initiates and manages key
policies and major operational
decisions relating to treasury
and direct taxes
Chair:
Jaideep Paul
Members:
Ravi Rajagopal
Annika Poutiainen
Raghu Mandava
Pier Falcione
Attendee:
Akhil Gupta attends to represent the
interests of Bharti Airtel in proposed
treasury transactions (such as bond
refinancing) affecting our parent
group and to convey actions of
Bharti Airtel which may affect Airtel
Africa
Share Scheme Committeee
• Administers our share schemes
• Composed of any two directors,
including at least one non-
executive director
Audit and Risk Committee
Monitors the integrity of financial
reporting and helps the Board review
the effectiveness of our internal
controls and risk management
Meets at least three times a year
Chair:
Ravi Rajagopal
Members:
Andy Green
Annika Poutiainen
Awuneba Ajumogobia
Akhil Gupta also attends as an
appointed observer on behalf
of Bharti Airtel Limited
Remuneration Committee
Determines the overall and specific
remuneration for executive directors,
officers and senior management
Meets at least twice a year
Chair:
Doug Baillie
Members:
Awuneba Ajumogobia
John Danilovich
Shravin Bharti Mittal also attends
as an appointed observer on behalf
of Bharti Airtel Limited
See Audit and Risk Committee report
on page 100
See Remuneration Committee report
on page 124
Nominations Committee
Advises on appointments, retirements
and resignations from the Board and
its committees and reviews succession
planning and talent development for
our Board and senior management
Meets at least twice a year
Chair:
Sunil Bharti Mittal
Members:
Doug Baillie
Andy Green
Ravi Rajagopal
See Nominations Committee report
on page 110
Market Disclosure Committee
Oversees our disclosure of information
to meet our obligations under the
Market Abuse Regulations (MAR)
by determining whether information
is insider information, or when and
how it needs to be disclosed
Monitors compliance with our MAR
disclosure, controls and procedures, as
well as the release of information under
the Information Flow Protocols and
Services Agreement with Bharti Airtel
Meets as necessary
Chair:
Andy Green
Members:
Doug Baillie
Raghu Mandava (CEO)
Ravi Rajagopal
Executive Committee
Our CEO oversees the operation of our business with advice and support from our
Executive Committee (ExCo). Convened and chaired by our CEO, this committee
helps him to fulfil his responsibilities by, for example, developing and implementing
our strategy, monitoring our operating and financial performance, assessing risk,
allocating resources and day-to-day operational management. The committee
meets fortnightly.
More details on the ExCo can be found on page 86
90
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: OurXleadership_v41
Modification Date: 26 May 2021 11:15 am
Governance report The Board’s focus in 2020/21
Regular items at Board meetings included:
• Our progress towards strategic objectives and key aspects
of the business
• Our financial position and prospects
• Treasury and investor relations (IR) matters
• Reports from brokers on shareholder movements, market and
peer activity, and share price performance
• Reports from the company secretary promoting and sustaining
good corporate governance, and advising the Board on procedures,
strategy and decision-making
• The activities of our Audit and Risk, Nominations and
• Directors’ duties and potential conflicts of interest, related party
Remuneration Committees, including stakeholder engagement
transactions and receipt of compliance certificates
• Business reports from the regional directors for East Africa and
Francophone Africa, the MD and CEO, Nigeria, as well as functional
reports from senior executives on key aspects of the business,
including legal and corporate governance matters
Other presentations during the financial year included human
resourcing and wider employee matters and stakeholder
engagement activities.
We applied the principles and complied with the provisions of the UK Corporate Governance Code (the Code) during the financial year
as set out below.
Code provision
Provision 9: the chair should be
independent on appointment when
assessed against the circumstances
set out in Provision 10
Provision 41: engagement with
the workforce
Explanation
The Board has concluded that Sunil Bharti Mittal did not meet the independence criteria of the Code
due to his interests in the company. However, in view of his extensive involvement with the company
and the Bharti Airtel Group over many years, the Board considers that he has made a major
contribution to our growth and success and unanimously agrees that his continued involvement is
crucially important to the ongoing success of Airtel Africa. The Board has put several safeguards in
place to ensure robust corporate governance during his tenure as chair. These include the
appointment of Andy Green as senior independent director to provide a sounding board for the chair
and serve as intermediary for the other directors and shareholders in line with governance best
practice. Appraisal of the chair’s performance also forms part of the annual Board evaluation exercise.
We are a large Board with six independent non-executive directors which is reflected in the committee
membership and structure. In accordance with the Code, the only committee the chair is a member
of is the Nominations Committee, which he also chairs.
We will continue to report against this provision while Bharti Airtel Limited remains a majority
shareholder or until the chair chooses to retire, when our current arrangements will be reviewed.
During the year, the Remuneration Committee did not engage systematically with our people to
explain how executive remuneration aligns with wider company pay policies.
Copies of the company’s Annual Report detailing the executive directors’ remuneration are widely
disseminated throughout the Group and available for employees to view on the company’s website
at www.africa.airtel.
Outside of travel restrictions brought about by Covid-19, visits to regional locations by our non-
executive directors provide an opportunity for a discussion on any topic with our employees.
During this financial year we became compliant with the following provision of the Code:
Code provision
Provision 36: executive director
shareholding
Explanation
Last year, we reported non-compliance with Provision 36 which states that the Remuneration
Committee should develop a formal policy of post-employment shareholding requirements
encompassing both unvested and vested shares. At that time, the committee considered that, in light
of the company’s unusual circumstances, with senior executives located in Africa where additional
requirements on the holding of shares are not market practice, the operation of bonus deferral and
post-vesting holding requirements provided sufficient alignment after employment has ended.
However, in response to shareholder feedback and clarifications from the Financial Reporting Council
in relation to what is and is not compliant with the Code, the Remuneration Committee has introduced
a formal post-employment share ownership requirement. For details of our share ownership policy,
see page 128.
We will no longer report against the following provision of the Code in relation to Doug Baillie, chair of the Remuneration Committee:
Code provision
Provision 32: Remuneration
Committee chair – prior service
Explanation
Doug Baillie has now served as our Remuneration Committee chair for over two years, since being
appointed to the Board in April 2019. The Board confirms that Doug has since displayed the skills and
experience required for the role and has the full support of the Board. We will no longer report against
this provision in future years.
© 2021 Friend Studio Ltd
File name: OurXleadership_v41
Modification Date: 26 May 2021 11:15 am
Airtel Africa plc Annual Report and Accounts 2021
91
Governance report Our leadership continued
Other matters considered during the year
Timeline
July 2020
Matter for consideration
We introduced two new standing business agenda items at the beginning of each meeting to create more time to focus
on regional and functional presentations by the relevant executive. The following timetable was agreed for the
presentation of business and functional papers:
July 2020
1. East Africa
2. People and culture – Chief HR officer
October 2020
1. Francophone Africa
2. Overview of regulation and legislation – Chief regulatory officer
January 2021
1. Nigeria
2. Network – Chief technology officer
May 2021
1. East Africa
2. IT – Chief information officer
We discussed and assessed the impact of Covid-19 restrictions on the business – for details see pages 16 and 17.
We discussed and endorsed our approach of entering strategic partnerships which support our ambition to transform
lives through greater financial inclusion and empowerment across the African continent. The Board approved the
business’s increased support of the communities where we operate by providing financial assistance to essential
workers and free data for educational purposes. The Board supported management’s efforts to work with
governments to temporarily waive fees on certain mobile money transactions. We also created an exciting
partnership with UNICEF to give children access to remote learning and their families access to cash assistance
through mobile cash transfers.
We debated the effectiveness of our focus on winning customers, investing in our network and expanding our voice,
data and mobile money businesses and agreed to continue with these elements of our strategy.
We discussed our dividend policy, proposing and debating three scenarios for a progressive dividend.
We approved the publication of our Q1 financials and RNS announcement.
The Board discussed the abandonment of the merger of Airtel Networks Kenya Limited with Telkom Kenya Limited.
In August 2020, Airtel Africa plc announced that its subsidiary Airtel Networks Kenya Limited and Telkom Kenya
Limited would no longer pursue the merger.
We discussed our Covid-19 statement in the half year results announcement and the implications of the telecoms
industry emerging as a key and essential service for the economies in which we operate.
We examined the evolving situation to identify key risks and put into place adequate mitigation plans to minimise
any potential disruptions.
We received information on market dynamics and expectations from our brokers.
We received an updated going concern paper based on 2020/21 half year performance – this also gave an update
on the impact of Covid-19 on both our business and liquidity positions.
We approved the publication of our half year financials and RNS announcement.
We approved a new progressive dividend policy resulting from continued strong business performance, significant
opportunities to invest in future growth and the aim to continue to reduce leverage. The newly adopted dividend policy
aims to grow the dividend annually by a mid- to high-single-digit percentage from a base of 4 cents per share for
financial year 2021, until reported leverage (calculated as net debt to underlying EBITDA) falls below 2x.
Following a management presentation, we endorsed the suggested approach to sustainability reporting (see pages
50-53).
We approved new partnerships with leading institutions WorldRemit, MoneyGram, Standard Chartered Bank
and Mukuru to increase use cases and improve customers’ access to digital payments and financial services.
We reviewed our licence arrangements.
We announced the appointment of Kelly Bayer Rosmarin as a non-executive director with immediate effect.
Kelly replaced Arthur Lang who stepped down as a non-executive director on the same date.
August 2020
October 2020
92
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: OurXleadership_v41
Modification Date: 26 May 2021 11:15 am
Governance report Timeline
November 2020
Matter for consideration
As part of our work to develop our sustainability and ESG profile and to align our culture and operations with this
priority, the Board attended a sustainability workshop and briefing session which was followed by a session attended
by our ExCo. The session was run by Hudson Sandler, our sustainability advisers.
December 2020
January 2021
Our corporate legal advisers Herbert Smith Freehills provided training on the political environment, governance reform,
liability to investors and the focus on directors’ duties. The subsequent Board discussion focused on audit, diversity,
market abuse and section 172.
We continued to look at strategic asset monetisation and investment opportunities for the Group, including the disposal
of our tower portfolios.
We reviewed how our nine-month performance reflected both the resilience of our business model through the
Covid-19 pandemic and, for the previous six months, a continued improvement in our execution and performance
as lockdown restrictions had eased across our countries of operation.
We approved the Annual Operating Plan and provided challenge including to the significant assumptions and impact
of Covid-19.
We received an update on going concern based on actual third quarter performance – this also updated us on the
impact of Covid-19 on the business and liquidity positions.
We discussed the new SIM registration rules in Nigeria.
We addressed the hedging opportunities by successfully mitigating the risk of prevailing currency devaluation cycles
and particularly the risk of naira devaluation.
We reviewed the refinancing plan for the EUR Bond 2021 and refinancing strategy for adopting Airtel Africa
standalone bonds.
We conducted an externally facilitated Board evaluation.
March 2021
We approved the publication of our Q3 financials and RNS announcement.
We considered the Board evaluation recommendations and plan for improvement.
May 2021
The Board approved the $200m investment by The Rise Fund and the $100m investment by Mastercard in Airtel
Money Commerce BV – further monetising and investing in our mobile money business towards our aim of listing Airtel
Money within four years.
We approved our full year consolidated annual financial statements and RNS announcement, our investor presentation
and final dividend.
© 2021 Friend Studio Ltd
File name: OurXleadership_v41
Modification Date: 26 May 2021 11:15 am
Airtel Africa plc Annual Report and Accounts 2021
93
Governance report Our leadership continued
Reporting against 2020/21 selected Board priorities
Strategy and execution (as disclosed in last year’s annual report)
2020/21 Board objectives
Making sure our strategy remains robust in
the light of forecast market and economic
changes
Ensuring our performance is on track to
achieve the strategy
Activities and progress
We regularly reviewed performance towards our strategic objectives and year-end performance
projections.
We reviewed and agreed our 2021/22 budget and received a detailed review of our financial
position, borrowing facilities and financing alternatives in relation to our strategic direction and
latest forecasts.
We revised our dividend policy and with input and advice from our Audit and Risk Committee:
• Determined the interim and final ordinary dividends for 2020/21
• Approved in principle the full year results statement, the half year results statement and the
quarterly statements
Responding to the challenges presented
by the Covid-19 pandemic
We discussed our strategic and operational response to the pandemic as a key part of the
CEO’s report to each meeting.
Governance and values (as disclosed in last year’s annual report)
2020/21 Board objectives
Ensuring our continued compliance with the
Code and with wider statutory and regulatory
requirements
Activities and progress
During the reporting period we assessed Airtel Africa and Bharti Airtel’s adherence to
separation and information-sharing protocols, as part of an externally facilitated governance
audit conducted by ANB Global and considered whether additional training is needed. Updated
training will be provided annually by our corporate legal advisers. The report returned a
satisfactory control environment rating.
We adopted Transforming Lives as our corporate purpose and continued to fully integrate this
across all communication streams.
Considering the articulation of Airtel Africa’s
corporate purpose – building on our strong
vision and values as stated in our business
model
Making sure our remuneration policy:
• is appropriate and able to incentivise our
executive team
• remains flexible enough to adapt to
each year’s developments and strategy
• is properly implemented
Developing a plan to act on and close
within the financial year the agreed
recommendations from the externally
facilitated Board evaluation and to
conduct our second evaluation exercise
Adopting our modern slavery statement,
establishing processes and detailed guidance
around the business and selecting key
employees to be trained to identify, assess
and report concerns to help reduce the risk
of modern slavery and related practices
Monitoring shareholder feedback and
continuing to actively promote wider
engagement
Ensuring the success of the Finance
Committee
Supporting the CEO and CFO in their one-to-
one mentoring programme
We had our remuneration policy and directors’ remuneration report approved by shareholders
at our 2020 AGM.
We conducted an externally facilitated Board evaluation and acted on the recommendations
for improvement.
See Board evaluation on page 97.
We have published our modern slavery statement on our website: www.airtel.africa and are
developing ways of measuring and improving existing processes and training.
See how we engaged with shareholders on page 37.
The committee met five times during the reporting period. We believe we have strengthened
financial independence by initiating and reviewing key policies and major operational decisions
relating to treasury and direct taxes.
We continued to engage our CEO and CFO with the mentoring programme during the
reporting period.
94
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: OurXleadership_v41
Modification Date: 26 May 2021 11:15 am
Governance report 2021/22 areas of focus
Strategy and execution
Our priorities for the year ending 31 March 2022
Ensuring our strategy remains robust in light of forecast market and economic changes (in line with the disclosure requirement under
Provision 1 of the Code)
Continuing to look at strategic asset monetisation and investment opportunities
Monitoring and overseeing operational performance
Governance and values
Our priorities for the year ending 31 March 2022
Reviewing our compliance with the UK Corporate Governance Code
Monitoring and taking account of stakeholder feedback and continuing to actively promote wider engagement
Ensuring the robustness of our succession plans
Reviewing our plans for improving diversity throughout the Group
Implementing the improvements recommended by the externally facilitated Board evaluation
Monitoring and reviewing the effectiveness of the information-sharing and separation protocols between Airtel Africa and Bharti Airtel
Sustainability
Our priorities for the year-ending 31 March 2022
Overseeing the implementation and embedding of our sustainability strategy and reporting progress next year
Reviewing our Task Force on Climate-related Financial Disclosures and identifying climate-related risks and opportunities
© 2021 Friend Studio Ltd
File name: OurXleadership_v41
Modification Date: 26 May 2021 11:15 am
Airtel Africa plc Annual Report and Accounts 2021
95
Governance report Our leadership continued
Board attendance
In addition to the quarterly scheduled meetings and AGM, during the 2020/21 reporting period the Board met another five times about our full
year financial statements and annual report approvals process, and for a sustainability workshop and other training. We regularly review the
frequency of meetings and have concluded that quarterly meetings are appropriate for the time being. Extending our quarterly Board and
committee meetings from one day to two has allowed more time for more meaningful strategic discussions. As well as extra Board meetings
as necessary, we have processes in place for approving transactions and other matters arising between meetings.
Directors make every effort to attend all Board and committee meetings – there was full attendance at all committee meetings during the
reporting period. If a director is unable to attend a meeting, they receive the papers in advance and give their comments to the chair to
communicate at the meeting; he also follows up with them after the meeting about decisions taken.
Directors’ other significant commitments are disclosed to the Board during the process of their appointment, and they are required to notify
the Board of any subsequent changes. The company has reviewed the availability of the chair and the non-executive directors to perform their
duties and considers that each of them can and does devote the necessary amount of time to Airtel Africa.
Board and committee meeting attendance
Scheduled
Board
meetings
Board members during 2020/21
Sunil Bharti Mittal2 (chair)
5 (5)
5 (5)
Raghunath Mandava (CEO)
Andrew Green (independent non-executive director)
5 (5)
Awuneba Ajumogobia3 (independent non-executive director) 5 (5)
5 (5)
Douglas Baillie (independent non-executive director)
5 (5)
John Danilovich (independent non-executive director)
5 (5)
Annika Poutiainen (independent non-executive director)
5 (5)
Ravi Rajagopal (independent non-executive director)
Akhil Gupta2 (non-executive director)
5 (5)
Arthur Lang4 (non-executive director)
3 (3)
Kelly Bayer Rosmarin5 (non-executive director)
2 (2)
Shravin Bharti Mittal5 (non-executive director)
5 (5)
Number of
additional
Board meetings
attended1
5 (5)
5 (5)
5 (5)
5 (5)
5 (5)
5 (5)
5 (5)
5 (5)
5 (5)
3 (3)
2 (2)
5 (5)
Audit and Risk
Committee
Remuneration
Committee
12 (12)
3 (3)
12 (12)
12 (12)
4 (4)
4 (4)
4 (4)
Market
Disclosure
Committee6
Nominations
Committee
3 (3)
3 (3)
3 (3)
2 (2)
2 (2)
2 (2)
3 (3)
2 (2)
1 Additional unscheduled Board meetings took place in connection with Covid-19, the approval of the Annual Report and related matters, preparatory work for our
sustainability statement and M&A type activity
2 Appointed in line with the Relationship Agreement
3 Appointed to the Audit and Risk Committee – October 2020
4 Stepped down as a nominee of Singtel in line with the Relationship Agreement – October 2020
5 Appointed in line with the Relationship Agreement
6 Met formally as needed twice during the reporting period, but also communicates monthly in writing before releasing information in line with the Information Protocols
and Service Agreement with Bharti Airtel
96
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: OurXleadership_v41
Modification Date: 26 May 2021 11:15 am
Governance report Board evaluation
The Board formally reviews its performance and that of its committees
every year between January and February. In line with our three-year
plan and building on the findings of the previous year, our 2021 review
was run for the second time by Lintstock, an independent board
review specialist. Lintstock has no other connection to our business
or any individual director.
This year we again used an online questionnaire tailored to our specific
activities and concerns. The Board, each of its committees, all of the
directors and the CFO and company secretary took part in the review,
and a report was prepared based on the completed questionnaires.
The results were discussed in detail by the Board and each committee,
facilitated by the respective chair and our company secretary.
Evaluation plan
Year 1
Externally facilitated independent review
Post-IPO + 7 months
Date: January and February 2020
Facilitator: Lintstock
Year 2
Externally facilitated independent review
Online questionnaire tailored to Airtel Africa’s
activities and concerns
Date: January and February 2021
Facilitator: Lintstock
Year 3
Externally facilitated independent review
with one-to-one interviews with each
director and the facilitator
Date: December 2021 to February 2022
Facilitator: To be confirmed
Process
Lintstock worked with our company secretary to set the context
for the evaluation, and to tailor survey content to our company
circumstances. We incorporated last year’s findings as well
as discussions with committee chairs, creating separate
questionnaires for each committee and for the chair and
individual director performance reviews. This year’s questions
explored areas for development identified in the 2020 review
and reflected the circumstances in which our Board and
business are operating. Board members were also invited to
assess their own contributions to the Board.
The surveys addressed core aspects of Board performance, with
a particular focus on:
• The clarity of our strategy, including internal and external
communication, and progress around our strategic pillars
• The Board’s understanding of the markets and competitive
context in which we operate, as well as the opportunities and
threats presented to the business by technological
developments
• The Board’s oversight of succession and talent management
processes, as well as company structure at senior levels and
the capacity to deliver the strategy
• The Board’s engagement with key stakeholders, including
employees, and the effectiveness with which the Board
monitors culture and behaviours throughout the company
• The effectiveness of our risk management systems and
internal controls
• The atmosphere in the boardroom, in terms of encouraging
candid discussion and critical thinking, and the extent to which
the Board provides effective support and challenge to
management
• The appropriateness of the Board’s size and composition,
including the skills, experience and diversity of members
• Each director’s contribution to the Board’s effectiveness
• The Board’s procedures and processes, including information
and resources made available to members
Evaluation for the year ended
31 March 2020
Last year’s evaluation was described in the 2020 Annual Report on
page 77. As a result of that evaluation, the Board and its committees
identified several key actions for the year ahead.
© 2021 Friend Studio Ltd
File name: OurXleadership_v41
Modification Date: 26 May 2021 11:15 am
Airtel Africa plc Annual Report and Accounts 2021
97
Governance report Board evaluation continued
Progress report on areas of focus for the year ahead as set out in our
2020 Annual Report
2019/20 evaluation
Board
Recommendations
Strategy, portfolio and positioning
To move beyond the necessary focus on
governance in preparation for our IPO to
a more sustained focus on business and
strategic issues by:
Progress
From May 2020: at the start of each Board meeting, we hear business
reports from the regional directors for East Africa and Francophone
Africa, the MD and CEO of Nigeria and functional reports from senior
executives covering legal and corporate governance matters
• increasing members’ understanding
of primary growth drivers
• developing Board knowledge of – and
exposure to – regional markets in Africa by,
for example, visiting subsidiaries and meeting
colleagues in the region
• focusing on the readiness plan for a digital
future
Governance and compliance
To develop a clear environmental, social and
governance (ESG) policy and continue to
improve Board engagement with stakeholders
To extend the quarterly Board and committee
programme to two days with more meetings
in Africa
Board process and composition
To keep the Board’s composition under review
with a view to increasing gender diversity in the
near term and bolstering technology expertise
To consider whether the CFO should join
the Board
Talent and succession
To increase engagement with our talent
management framework to better understand
our internal and external talent pipeline
To consider adding a fourth member to the
committee
To have additional training on developments in
UK regulations and new codes such as the Brydon
and Kingman Reports, section 172 requirements
and corporate governance standards
To better coordinate from a management
perspective the respective annual plans
of our internal auditors (EY)
To better understand capex controls
To conduct a deep dive into our IT processes
and to assess the reporting systems of internal
controls which support management information
To significantly progress with monitoring risk
management
To conduct a deep dive into billing controls and to
identify areas of improvement so as to avoid key
potential risks such as leakages, and network
configuration hacking
To review and agree on the agenda for the next
financial year with management and external
auditors
While pandemic-imposed travel restrictions curtailed our ability to visit
regional sites and colleagues in person, Board members were invited
to attend the virtually hosted senior leadership meeting in April 2021.
This gave them the opportunity to meet colleagues in both plenary
and breakout sessions
This year we launched Airtel Africa Digital Labs as our digital engine.
Our pioneering digital innovation spans analytics, platforms, and
consumer and enterprise product engineering
From May 2020: quarterly Board and committee meetings lengthened
to two days – during all the reporting period all meetings were held
online
October 2020 sustainability reporting: following a management
presentation, the Board endorsed the suggested approach to
sustainability reporting (see page 50)
November 2020: Board sustainability workshop, and UK corporate
governance and regulatory environment briefing session.
See the Nominations Committee report on page 110 for progress
Jaideep Paul, Chief financial officer, has been appointed as an
Executive director and will join the Board of Airtel Africa plc with
effect from 1 June 2021
See the Nominations Committee report on page 110 for progress
October 2020: Awuneba Ajumogobia appointed
July 2020: UK corporate governance and regulatory environment
updates provided by Deloitte in their planning reports
April 2020: overall internal audit plan for 2020/21 presented
Capex has been a recurring focus at Board, Audit and Risk and Finance
Committee discussions. It forms part of the CEO’s report to the Board
See page 104 for our strategic focus where we set out our intention
to extend further our oversight of the company’s risk management
framework and further improve the quality of our risk discussion
See page 72 for significant progress with risk monitoring
In response to the improvements identified, we rolled out a security
infrastructure and completed the network rollout. We plan to perform
a validation exercise against these improvements and enhanced billing
controls in the coming year
See page 72 for progress on mitigating key risks
Continuing activity
Audit and Risk
Committee
98
Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: OurXleadership_v41
Modification Date: 26 May 2021 11:15 am
Governance report 2019/20 evaluation
Remuneration
Committee
Recommendations
To provide updates outside of Board meetings
To better understand different aspects of
remuneration, STIP and LTIPs and benchmarking
To more deeply consider senior management
remuneration in 2021
To provide updates on emerging and future
trends in compensation
To better engage with new hires and other senior
executives
To create more robust succession plans for critical
roles, identifying two to three candidates ready to
step up within two to four years
To support and encourage more strategic
discussions in Board meetings
Nominations
Committee
Chair’s review
Progress
The chair is in monthly contact with members outside of Board
meetings
January 2020: training on general remuneration matters and
governance held by Alvarez & Marsal
February 2020: session on share plans delivered by Clifford Chance
August, September and October 2020: three additional meetings held
with a focus on senior management remuneration
Remuneration consultant provides updates at each meeting
Due to travel restrictions, all plans for Board members to visit sites and
attend meetings, and to take advantage of the more informal
opportunities this brings, were cancelled. We will renew our focus on
this as soon as possible
See page 110 for progress on leadership succession planning
The Board met during the year on three1 occasions outside of
the quarterly Board cycle to discuss our strategy of focusing on an
asset-light business model and core subscriber-facing operations.
This resulted in an increase to the minority shareholding in our mobile
money business and the strategic divestment of our tower portfolio
1 23 December 2020; 17 March 2021; 30 April 2021
2021 evaluation results
From the anonymised survey responses and interview feedback,
Lintstock identified themes, focus areas and recommendations for the
Board and its committees. The results of the self-assessment element
of the survey were shared with the chair and discussed at one-to-one
meetings between the chair and directors. The results of the chair’s
review were shared with the senior independent director, who
then discussed the chair’s performance with the non-executive
directors only. The chair and company secretary presented the reports
to the Board in March 2021 for discussion and review. Recognising its
strengths and areas to develop, the Board agreed actions for the
coming year, as set out here.
Summary conclusions
The 2021 evaluation has shown that the Board has the appropriate
composition, with the balance of skills, experience, independence and
knowledge to discharge Board and committee duties and responsibilities
effectively. Respondents unanimously agreed that the Board had
performed well over the year and was operating effectively.
The chair confirmed that individual directors continued to perform and
show commitment to the role. The Board concluded that all directors
were effective, giving sufficient time to their Board duties and making
valuable contributions. In light of this, the Board proposed the election
and re-elections set out in the 2021 Notice of Annual General Meeting.
The committees also discussed the results of their respective
evaluation reports and agreed actions where appropriate. The senior
independent director met with the chair privately to discuss the
anonymised results of the chair’s review section of the survey and the
outcomes of his discussion with non-executive directors. The overall
effectiveness of the chair was seen as excellent, reflecting a genuine
focus on the best outcomes for the company in all aspects of his role.
The chair drew up a list of action points based on the evaluation and
allocated responsibility for completing the actions. The Board will
review progress against these at each meeting.
This evaluation took place in the context of a pandemic, where Board
members were unable to meet in person. In spite of this, there were
positive views on the effectiveness of our virtual meetings, as well as
the relationships and dynamics of the Board.
2020/21 key actions
2020/21 evaluation
Board
Audit and Risk Committee
Remuneration Committee
Nominations Committee
Market Disclosure Committee
Areas of focus recommended
• Inorganic growth opportunities
• Oversight of employee sentiment and culture
• Enhanced understanding of regulatory and public policy developments
• Launch of our sustainability strategy
• Determining how much time it will spend managing risk and delving into risk and judgement
areas, as opposed to receiving reports
• Focusing more on internal assurance and systemic solutions
• Embedding our sustainability strategy within the remuneration policy and the committee’s
future activity
• Talent and succession
• Regulatory developments
Re-election of directors
In line with the Code, all directors will be putting themselves forward for election and re-election at our AGM on 15 July 2021. Following the formal
performance evaluation described here and taking into account each director’s skills, experience and contribution (set out on pages 82-84), the
Board believes that the election and re-election of all directors is in the best interests of Airtel Africa.
Airtel Africa plc Annual Report and Accounts 2021
99
© 2021 Friend Studio Ltd
File name: OurXleadership_v41
Modification Date: 26 May 2021 11:15 am
Governance report Part 1
Chair’s statement
I’m pleased to present this Audit and Risk Committee report for the
reporting period ended 31 March 2021. As described in this report,
we have made significant progress over the year, including our role in
monitoring the integrity of the Group’s financial statements and the
effectiveness of the internal and external audit processes. This report
provides an overview of the significant issues the committee has
considered during the year and its material judgements.
Our committee has provided a clear explanation of matters affecting
going concern, viability and liquidity, and the key assumptions and
judgements in assessing going concern.
This year, we thoroughly reviewed management’s assessment of the
current and potential future effects of Covid-19 on the business,
including the impact on key judgements such as impairment and going
concern. We communicated how Covid-19 and the resulting economic
uncertainty have affected our resilience, as well as the judgements and
assumptions the Board has made when assessing resilience and in
preparing company financial statements. We are comfortable with the
explanations provided by management about the impact of Covid-19
on cash and liquidity, key actions taken or planned and the longer-term
impact of Covid-19 on the business – see page 16 for our Covid-19
statement.
A particular focus has been our responsibility to help the Board review
the effectiveness of our internal control management systems. Our
internal audit function identified IT and network controls as potential
areas of vulnerability. As a result, in January 2021, our committee
began a thematic risk management review into IT security and
network security systems. Following the presentation of the review’s
findings, we were assured that management had in place effective
procedures around IT and network security. A continuing priority
for this year is to develop our risk management framework.
Our committee discussed with our head of Internal Audit our reporting,
forecasting and risk management processes and was assured by the
responses that the risk and control environment was operating
appropriately for the business.
Deloitte’s risk assessment this year resulted in the inclusion of an
additional significant risk in their audit plan around the accuracy of
Airtel Money revenue. Regulatory matters are now regarded as a
higher risk, with all other significant risks unchanged from March 2020.
I’m pleased to report that the Finance Committee, established in 2020,
has achieved its objective to improve treasury and tax controls and
strengthen adherence to the information flow protocols set out in the
Relationship Agreement. Annika Poutiainen and I have agreed to
continue as members in our stewardship roles for another 12 months,
when the transition to an operational management committee should
be completed.
Audit and Risk Committee report
Ravi Rajagopal
Chair, Audit and Risk Committee
Attendance
Ravi Rajagopal
Chair
Andy Green
Annika Poutiainen
Awuneba Ajumogobia1
1 Appointed October 2020
Meetings
attended
12 (12)
12 (12)
12 (12)
3 (3)
Committee responsibilities
• Advises the Board on proposed full year, interim reporting and
connected announcements
• Reviews our annual and half year financial statements, including
significant financial reporting judgements and misstatements,
and accounting policies, internal and external audits and controls
• Recommends the dividend policy to the Board
• Assesses the effectiveness of our financial reporting procedures
and related internal controls
• Oversees our relationship with the external auditor – reviewing
and monitoring their independence and objectivity, advising on
their appointment and effectiveness, reviewing and monitoring
the scope of the annual audit and the extent of non-audit work
• Reviews our principal and emerging risks (see page 72)
• Monitors and reviews the effectiveness of our internal audit
activities, including internal controls and fraud systems, and
identifies remedies for any significant failings or weaknesses
• Reviews our whistleblowing arrangements and makes sure
arrangements are in place for proportionate and independent
investigations of employee concerns
• Reviews our controls for preventing bribery, our code of conduct
and our policies for ensuring full compliance with regulatory and
legal requirements
• Through the committee chair, engages with shareholders on
matters relevant to committee responsibilities
• Advises the Board on whether the Annual Report and financial
statements are fair, balanced and understandable and provides
information to help shareholders to assess our position and
performance, business model and strategy
• Ensures the independence of the finance function through the
Relationship Agreement (see page 120)
• Monitors changes to legislation and the UK Corporate
Governance Code and ensures regulatory compliance
For more details of responsibilities, please see the committee’s
terms of reference at www.airtel.africa/investors/governance.
100 Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: AuditXandXRiskXcommittee_v59
Modification Date: 26 May 2021 8:23 am
Governance report
Committee members and attendance
Our committee consists of four independent non-executive directors:
Ravi Rajagopal (chair), Andy Green, Annika Poutiainen and Awuneba
Ajumogobia. As a result of the 2020 committee evaluation, we decided
to add a fourth member; and Awuneba agreed to join in October 2020.
As a collective, we have a thorough understanding of the telecoms
sector, including recent and relevant financial experience and expertise
gained over the years through various corporate and professional
appointments. For more about Ravi, Andy, Annika and Awuneba,
see the directors’ biographies on pages 82-84.
Our meetings are also attended by the CEO, CFO, deputy CFO, head of
internal audit and chief compliance and risk officer, along with internal
audit partners (ANB and EY) and other senior executives. Our external
auditor, Deloitte, was invited to and attended all meetings. Akhil Gupta
also attends our committee meetings as an appointed observer on
behalf of Bharti Airtel.
Our scheduled quarterly meetings generally take place shortly before
Board meetings. These are usually preceded by two pre-meetings,
one focused on internal audit and the second providing a forum
where any issues requiring additional time are aired and discussed.
At each quarterly meeting, we review summary reports from internal
assurance, as well as financial results and details of action taken or
proposed plans. We also receive summary reports from our external
auditors at the half year and year end. Our committee chair then
reports to the Board on our activities, recommendations and other
relevant matters.
Part 1
We also assessed the quality of the finance team, their incentives and
the need for supplementary skillsets. As a result, we strengthened the
listed company experience within the team with the recruitment of a
technical accountant with UK listing experience – and are now
satisfied with the calibre and commitment of the team.
On 24 February 2021, the Group’s March 2020 Annual Report and
Accounts were reviewed by the Corporate Reporting Review team
(CRR) of the Financial Reporting Council (FRC) as part of their regular
annual review of UK companies. The Group received one query and
a number of recommendations. The Audit and Risk Committee
considered the query and recommendations and approved the
responses prepared by management. The Group on 1 April 2021,
received confirmation from the CRR that its query had been closed.
All items on the recommendation list were considered and appropriate
disclosures have been made in the 2021 annual report wherever
applicable. The Committee does note however that the review
conducted by the FRC was based solely on the Group’s published
Annual Report and Accounts and does not provide assurance that
the Annual Report and Accounts are correct in all material respects.
We also reviewed the practice of audited quarterly reporting adopted
by the Group at the time of listing. Following a review of our financial
reporting processes we now publish the first and third quarter press
releases without a private review opinion by our auditors, Deloitte UK
addressed to the company’s directors’. Our financial results for the half
year are reviewed and the full year are audited by Deloitte UK.
Climate-related disclosure
In relation to the UK government’s proposal for mandatory future
Task Force on Climate-related Financial Disclosures (TCFD) by 2022,
the Financial Conduct Authority (FCA) requires all premium listed
companies to make climate-related disclosures in line with TCFD,
or explain why they have not, for accounting periods beginning on
or after 1 January 2021. Our committee will assess the risks from
climate change and how these should be reported on during the
next 12 months.
Conclusion
I would like to thank the management team at Airtel Africa and each
of the committee members for their support and contribution during
the year.
I welcome questions from shareholders on this committee’s activities.
To discuss any aspect of this report please contact me via our
company secretary, Simon O’Hara (see page 219 for contact details).
I will be also attending the 2021 AGM and look forward to the
opportunity to meet and speak to you there.
Ravi Rajagopal
Chair, Audit and Risk Committee
11 May 2021
© 2021 Friend Studio Ltd
File name: AuditXandXRiskXcommittee_v59
Modification Date: 26 May 2021 8:23 am
Airtel Africa plc Annual Report and Accounts 2021
101
Governance report Audit and Risk Committee report continued
Progress report on our committee’s areas of focus for the year ahead as set out in our
2020 Annual Report
Part 1
Activity
Strategic focus
2020/21 committee objectives
To assess the impact of Covid-19
Strategic focus
To discuss and define levels of risk appetite
for the company
Strategic focus
To increase our oversight of various aspects
of the company’s risk management and improve
the quality of risk discussions at meetings
Strategic focus
To thoroughly review our cybersecurity and assess
both risks and necessary mitigating actions
Strategic focus
To review our compliance with GDPR and other
data protection arrangements
Strategic focus
Reviewing management’s testing on design and
implementation of key controls
Actions taken
We reviewed and challenged the actions taken by
management as well as the assessments performed and
concluded accordingly. For details:
See the CEO’s statement on page 10
See our Covid-19 statement on page 16
See our going concern assessment on page 154
Our focus last year was on controls management,
highlighted elsewhere in this report. We’re stepping
up our focus on risk appetite throughout this year,
as outlined on page 104
We reviewed our risk management and identified
11 principal and two emerging risks.
In July 2020, we received and reviewed the first of a series
of papers on the key controls framework which detailed the
key Enterprise Risk Management (ERM) risks and their key
controls coverage, and analysed whether the control
environment provided the required coverage. We agreed
that the key control framework be further developed to be
operationally efficient and effective.
Throughout the year the committee received detailed key
issues reports including updates on IT and network security.
We reviewed the nature of the risks presented and
approved the mitigation plans.
In January 2021, the committee began a thematic risk
management review into IT security and network security.
This assured the committee that management had in place
an effective risk review system. We agreed that this should
be developed into a risk management framework
encompassing by-exception reporting aligned with our risk
appetite and showing key risk indicators.
We’re increasing our focus on this from this year, as outlined
on page 104.
In January 2021, during the thematic risk review sessions
on IT and networks, we reviewed reports covering cyber
and information security threats from the CTO and CIO.
The landscape changed during the year for Airtel Africa,
with data privacy across our operating footprint taking on
critical importance. As a result, in 2020 the Board approved
a three-year internal audit plan with a greater focus on data
privacy.
Our compliance with GDPR was reviewed in April 2018 prior
to listing by both EY and by Deloitte as part of the Financial
Position and Prospects Procedures (FPPP) review, and our
Board reviewed arrangements for GDPR compliance at the
time of listing.
In October, the financial reporting team demonstrated our
new controls framework (ICOFR). This will be subject to
independent review by our internal auditors to test the
effectiveness of the key controls before the 2022 year end.
Further, we implemented a key controls framework by
extending our internal financial controls framework (ICOFR)
to include non-ICOFR processes and controls. The internal
assurance team also held several workshops with the
enterprise risk management team to develop an integrated
assurance model. As a result, from 1 April 2021, we began
to implement a coordinated structure for planning,
executing and reporting on internal audit, compliance and
risk activities across our 14 OpCos and head offices.
See page 104.
102 Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: AuditXandXRiskXcommittee_v59
Modification Date: 26 May 2021 8:23 am
Governance report Activity
Ongoing activity
2020/21 committee objectives
To increase committee members’ understanding
of regulatory requirements, such as developments
in UK regulations and section 172 obligations
Ongoing activity
Supporting the Internal Audit team in a continuous
review of internal financial controls and monitoring
Ongoing activity
Monitoring the integrity of the company’s financial
statements
Conducting the assessment of whether, taken as a
whole, the Annual Report and financial statements are
fair, balanced and understandable (Code Provision 27)
Ongoing activity
Ongoing activity
Assessing the quality and effectiveness of the external
auditor (Code Provision 26)
Going concern
Ongoing activity
Review key tax matters
Ongoing activity
Review of key judgements and key accounting estimates
for bias
Actions taken
In July 2020, Deloitte, as part of their planning reports
and year-end reports, provided updated briefings on
developments around audit market reform, audit quality,
and corporate governance and accounting which informed
the committee’s activities for the year.
We reviewed quarterly reports from Internal Audit.
We met with Internal Assurance in October to establish
the balance between internal and outsourced resources
and to identify gaps and enhancements. The outcome
of these discussions is reflected in the March 2021 internal
audit plan.
See our review of the 2021 Annual Report on page 105.
See engaging our auditors on page 108.
We reviewed management’s assessment of the going
concern assumption, challenged the basis of the
assumptions used in the cash flow forecasts and
performed a robust review of sensitivities adopted
in worst case scenarios.
We examined whether our principal and emerging risks,
and the impact of Covid-19 on our Group’s liquidity were
appropriately factored in.
We reviewed the calculation of the effective tax rate, the
recording of uncertain tax provisions and the recognition
of deferred tax assets and the subsequent disclosure in
this report.
We reviewed the key judgements and key accounting
estimates used by the management on areas including
uncertain tax treatments, deferred tax recoverability and
accounting for provisions and contingencies and were
satisfied with management’s conclusions on these matters.
© 2021 Friend Studio Ltd
File name: AuditXandXRiskXcommittee_v59
Modification Date: 26 May 2021 8:23 am
Airtel Africa plc Annual Report and Accounts 2021
103
Governance report Audit and Risk Committee report continued
2021/22 areas of focus
Our committee will continue its in-depth reviews into specific financial, operational and regulatory areas.
Part 1
Priorities
• Giving more time to our risk management framework to ensure
risk remains within our agreed appetite and is monitored and
reviewed as needed to reflect external and internal changes
• Clarifying processes and control performance to help people identify,
monitor and mitigate risk earlier and more effectively
• Taking a close look at the robustness of our systems for risk
reporting, assessment and control and ensuring that we focus
on the areas of greatest risk
• Reviewing our regulatory risks, including the tax regime
Planned actions
We have a schedule for topic-based risk presentations at each
committee meeting.
Meeting
Q1 FY21/22
Risk focus
HR
Q1 FY21/22
Supply chain
Q2 FY21/22
Compliance
Q2 FY21/22
Finance
Q3 FY21/22
IT
Q3 FY21/22
Network
Q4 FY21/22
Regulatory
Q4 FY21/22
Legal
Q4 FY21/22
ICOFR process
Planned topics
Leadership succession
planning
Increase in cost structure,
vendor governance
Principal and emerging risk
update
Internal controls and
compliance, financing and
foreign exchange risks
Technology obsolescence,
network resilience and
business continuity
Digitisation and innovation,
technology obsolescence,
cyber and information security
threats
Airtel Money regulatory risks,
Know your client and Quality
of service non-compliance,
licence fee and telecoms taxes
and other top risks
Compliance with legal
requirements
Effectiveness of our internal
financial controls framework
Reprioritising the Internal Assurance scope to focus on areas
with potential business impact
Reviewing financial reporting controls
The committee recognised that the impact of the pandemic prompted
the business to find new ways to contain costs, improve efficiencies
and protect our balance sheet. To help us manage this change, we have
agreed that Internal Assurance will support the business by focusing
on high-risk and high-benefit areas, improving compliance-related
processes and controls, deepening our understanding of operational
activities and offering suggestions for improving processes and
enhancing controls.
The four enhanced coverage areas are a new capex deployment cycle
(Q3), the processes for communicating with customers to ensure the
collection of money owed (dunning processes) (Q2), efficiency
opportunities (Q3) and site profitability (Q4).
We will involve subject matter specialists, where required, to bring new
perspectives and industry better practices to the areas under review.
As a business, we’re extremely reliant on technology. Effective
technology controls are important not just to address financial risks,
but also for operational, regulatory and reputational risks.
We will continue to review the internal financial controls framework
for comprehensiveness and robustness and consider management’s
plan for a greater use of automation within the tax, legal and
regulatory processes.
We introduced our new controls framework (ICOFR) and performed
an audit needs assessment to inform our internal audit strategy.
Where manual review controls remain, we’ll continue to focus on
improving their precision by reviewing and documenting how each
control operates and maintaining evidence of their effectiveness.
We will discuss and review our internal auditor’s observations on the
effectiveness of the key controls planned to be undertaken before the
2022 year end.
104 Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: AuditXandXRiskXcommittee_v59
Modification Date: 26 May 2021 8:23 am
Governance report Financial reporting
We reviewed the integrity of the quarterly, half year and full
year financial statements. We also examined other statements
containing financial information, including trading updates and
investor presentations and packs, and recommended their approval
to the Board.
We assessed:
• The quality, appropriateness and completeness of the significant
accounting policies and practices and any changes to these
• The reliability and integrity of our financial reporting, including key
judgements and whether to support or challenge management’s
judgements
• External audit findings, including their review of key judgements
and the level of misstatements
• The quality of the finance team, their incentives and the need for
additional skillsets
• The completeness of disclosures in the Annual Report and interim
reports, including consistency with disclosures on our business
model and strategy
• The application of the FRC’s guidance on clear and concise
reporting in this report, as well as compliance with financial reporting
standards and other reporting requirements
• The CFO’s reports, which set out the rationale for the accounting
treatment and disclosures regarding judgements and estimates
Deloitte UK also shared their views on the treatment of significant half
year and full year matters. They summarised each issue and assessed
the appropriateness of management’s judgements or estimates.
In considering whether there was evidence of bias, the committee
examined the overall level of reasonableness applied during the year.
Reviewing the 2021 Annual Report
At the request of the Board, our committee was asked to review this
Annual Report and to consider whether, taken as a whole, it was fair,
balanced and understandable. The committee considered the
following areas:
Fairness and balance
• Is the report open and honest? Are we reporting on our
weaknesses, difficulties and challenges alongside our successes
and opportunities?
• Do we clearly explain our KPIs and is there strong linkage between
our KPIs and our strategy?
• Do we show our progress over time and is there consistency in our
metrics and measurements?
Understandable
• Do we explain our business model, strategy and accounting policies
simply, using precise and clear language?
• Do we break up lengthy narrative with quotes, tables, case studies
and graphics?
• Do we have a consistent tone across the Annual Report?
• Are we clearly ‘signposting’ to where additional information
can be found?
Following our review, we confirmed to the Board that this Annual
Report is fair and balanced and provides enough clarity for
shareholders to understand our business model, strategy, position and
performance.
© 2021 Friend Studio Ltd
File name: AuditXandXRiskXcommittee_v59
Modification Date: 26 May 2021 8:23 am
Airtel Africa plc Annual Report and Accounts 2021
105
Governance report Audit and Risk Committee report continued
Part 2
Significant issues and our response
We considered the following significant issues and key matters in the context of the financial statements, discussed them with our external
auditor, and have found the response to each appropriate and acceptable.
Significant issue
Going concern
assessment
Actions taken
Given the continued uncertain nature of the current macro-economic environment due to Covid-19, and taking note of the
latest guidance on going concern as issued by the Financial Reporting Council in June 2020 and December 2020, and the
thematic review published in July 2020, the committee received a detailed paper from management and reviewed the
assumptions made in reaching the conclusion that the financial statements should be prepared on a going concern basis.
This included:
• Cash flows under a base case and reasonable worst-case scenarios (capturing the risks and uncertainties described on
pages 72-78)
• Sensitivities considered and output of stress testing performed
• Solvency and liquidity positions
• Borrowing facilities including undrawn committed facilities
• Updates reflecting the expected impact of Covid-19
• Disclosures in the annual report (refer to page 141)
Viability
statement
The committee concluded that the going concern basis of accounting was appropriate in preparing the financial
statements. For more information on the going concern assessment see note 2.2 of the financial statements.
Given the uncertain nature of the macro-economic environment due to Covid-19 , the long-term viability assessment of the
group was reviewed in detail considering the longer-term view of our strategy and business model.
Our review covered:
• Company prospects
• The period under consideration
• Principal risks (refer to pages 72-78)
• Longer-term cash flow forecasts
• The sensitivities considered in management’s stress-testing model, including the impact of Covid-19
We challenged the rationale of using a three-year period for the purpose of our viability assessment comparing with a
longer period for impairment purposes. We discussed the justification with the management which was then covered by
updating the disclosure on the Board’s assessment of LTVS (refer to page 79).
Taking into account potential mitigating actions, we were satisfied with the conclusion and disclosure on the Group’s
viability and endorsed a three-year period as the basis for preparing the viability statement.
Our 2020/21 long-term viability statement and more details on the assessment is on page 79.
In addition to the significant issues mentioned above, we also considered the following accounting and financial reporting issues, judgements
and estimates in the context of the financial statements.
Other issues
Niger settlement
and revenue
recognition
Actions and conclusions
Airtel Africa received a one-time benefit of $20m as a settlement in Niger. (Airtel Niger signed an Indefeasible Right of Use
‘IRU’ deal with a Niger telecommunications operator, and as part of the commercial agreement the amounts owed from
the operator for prior periods not previously recognised were settled and recognised as an exceptional item.)
Capitalisation of
deferred spectrum
payments
Goodwill
impairment
The committee challenged the basis of recognising revenue as an exceptional item and concluded that the accounting
treatment and associated disclosure was appropriate and in line with the exceptional item policy of the Group given this
was one-off transaction in the year and above Group threshold for exceptional items.
We reviewed and challenged management’s assessment that annual spectrum fees which are fixed should be capitalised
as an intangible asset with a financing liability also recorded. Our practice had historically been to expense such payments.
We confirmed that the resulting impact on network costs, interest costs and amortisation is not material. There was also
an immaterial impact on profit before tax.
We received a detailed management paper on impairment and challenged the appropriateness of the assumptions and
judgements adopted for the annual impairment testing exercise in December 2020 including the use of a 10-year plan
which the committee was satisfied was appropriate based on the African telecom markets which are underpenetrated
when compared to developed markets. In forming this view, we also reviewed the sensitivities performed by management
on key assumptions such as the discount rate, growth rates and on the headroom if a five-year plan had been adopted
with appropriate long-term growth rates.
Exceptional items We reviewed all exceptional items during the year and considered whether the items met the definition as an exceptional
item under Group policy and FRC guidance and were satisfied with management’s position and conclusions. We will
continue to review the relevance of the Group’s exceptional item policy with respect to applicability and thresholds every
year in line with FRC guidance and the practices adopted by other FTSE companies.
106 Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: AuditXandXRiskXcommittee_v59
Modification Date: 26 May 2021 8:23 am
Governance report Part 3
Other issues
Tanzania DTA
recognition and
review of effective
tax rate
Actions and conclusions
One of the Group’s subsidiaries in Tanzania had carried forward losses and timing differences on which deferred tax assets
had not been recognised.
We reviewed and challenged management’s assumptions that taxable profits are now probable and available against
which tax losses and temporary differences could be used – meaning that a deferred tax asset should now be recognised,
and we were satisfied with management’s conclusion that an asset should be recognised for the first time this year.
Review of legal/
regulatory matters
Audit Quality
Review Team
(AQRT)
We also reviewed the calculation of the effective tax rate and found this to be satisfactory.
The committee reviewed the key developments in material legal and regulatory cases during the period, management’s
estimate of key legal and regulatory disputes, and how these were rated by management as probable, possible or remote.
The committee was satisfied with the recording and disclosures in the financial statements of legal and regulatory cases.
The committee was notified during the year that the Audit Quality Review Team (AQRT) of the UK Financial Reporting
Council (FRC), had completed their review of Deloitte’s audit file for the March 2020 audit of the Group. The review was
part of the AQRT’s routine annual inspection process. The focus of the review and their reporting is on identifying areas
where improvements are required rather than highlighting areas performed to or above the expected level. The chair of the
committee received a full copy of the findings of the AQRT and has discussed these with Deloitte. The committee
confirmed that there were no significant areas for improvement identified, there were no key findings within the report and
was satisfied that there is nothing within the report which might have a bearing on the audit appointment. Good practice
was identified in the area of the Group audit team’s oversight and involvement in the component auditor’s work over
prepaid revenue.
Risk management and internal controls
Our approach to risk
As highlighted in the strategy and risk sections of the strategic report,
risk management is inherent to our management thinking and
business-planning processes. The Board has overall responsibility
for establishing and maintaining our risk management and internal
control systems.
For more information on our risks and mitigation and our risk
management framework, see the risk report on pages 72-78.
Progress in 2020/21
Each quarter, our CEO and CFO provide a compliance certificate
connected to the preparation of our financial results. This includes the
policies and procedures for areas of the business under their
responsibility and confirms the existence of adequate internal control
systems throughout the year. Our committee reviews any exceptions
noted in this exercise.
The key features of our internal control system which assures the
accuracy and reliability of our financial reporting are listed on page 107.
The Board also reviewed more detailed assessments of risk from our
committee,(previously reviewed by the management Executive Risk
Committee). At its meeting in January 2021, our Board agreed that
our system of internal control continues to monitor the identification,
assessment and ranking of the various principal and emerging risks we
face as a business, as well as reporting progress in mitigating potential
impact.
The Board also approved the statement of the principal risks and
uncertainties set out on pages 72-78.
Working to minimise the risk of fraud, bribery
and corruption
We apply a range of activities to mitigate the risk of fraud; and
minimising the risk of fraud remains one of the key areas of focus for
Internal Audit. In doing this, we assess the quality of balance sheet
reconciliations, key judgement matters, tenders and quotations,
and controls over payments and associated applications.
We continue to focus on limiting our potential exposure to bribery
and corruption risks, for example by providing mandatory training,
reviewing financial records and developing our policies and
procedures. Our contract management system now includes
mandatory certification to our Code of Conduct and anti-bribery
and corruption policy. Each year, every employee must take part
in computer-based training on anti-bribery and corruption and our
Code of Conduct. Our Internal Audit team reviews our anti-bribery
compliance programme to assess its continued effectiveness. We will
continue to assess the bribery risks in the markets where we operate
to refine and improve our anti-bribery compliance programme.
Our committee also monitors and oversees procedures around
allegations of improper behaviour and employee complaints.
Whistleblowing procedures
Our whistleblowing programme is a confidential channel through
which employees can report unethical practices or wrongdoing. We
have an independent whistleblowing process managed by an external
professional services firm from their Centre of Excellence in South
Africa. Throughout the reporting period, we received updates on the
volume of reports, key themes emerging from these reports and the
results of related investigations.
Our committee chair provides a report to the Board at each of its
meetings on the operation of our Code of Conduct, anti-bribery and
corruption and whistleblowing procedures. This report contains
enough detail to enable the Board to continue to oversee these areas
and ensure that arrangements are in place for the proportionate and
independent investigation of related matters and for follow-up action.
Internal Audit
Our Internal Audit team takes a risk-based approach to reviewing
the design and effectiveness of our internal control systems for key
business processes and risks. They consider compliance with internal
policies, regulatory obligations and how to minimise the risk of fraud.
Internal Audit performs independent testing and evaluation of our
controls. The team is governed by the internal audit charter, as
approved by the Audit and Risk Committee, and is headed by our
chief internal auditor, who reports to the committee and the CEO.
Our committee chair regularly meets with the chief internal auditor
to discuss the team’s activity and any significant issues arising from
their work.
At each quarterly committee meeting, we monitor and review the
scope and effectiveness of Internal Audit. The committee approves the
annual audit plan before the start of each financial year and receives
updates on activity, progress against the approved plan and the results
of any unsatisfactory audits, including key issues and action plans to
address them.
Airtel Africa plc Annual Report and Accounts 2021
107
© 2021 Friend Studio Ltd
File name: AuditXandXRiskXcommittee_v59
Modification Date: 26 May 2021 8:23 am
Governance report Audit and Risk Committee report continued
Part 3
Part 4
During the past year the Special Investigations team within Internal
Audit investigated over 180 potential Code of Conduct breaches. 117
were external (connected to customers or theft or part of our activities
to minimise the risk of fraud, bribery and corruption); and 56 were
internal (including those related to whistleblowing and other grievance
procedures). These cases were reported through multiple channels,
including from customers and service providers and through informal
whistleblowing. Over the same period, we received 26 reports through
our formal whistleblowing line.
The Internal Audit team worked during the year to ensure that it
continues to meet both current good practice and the evolving needs
of Airtel Africa. Initiatives included:
• Integrated assurance: Internal Audit held several workshops with
Enterprise Risk Management (ERM) to develop an integrated
assurance model. One outcome was a coordinated structure for
planning, executing and reporting on internal audit, compliance and
risk activities within our 14 OpCos. In planning for the 2022 financial
year, Internal Audit also assessed our principal and emerging risks as
identified during the joint risk assessment process.
Our committee reviewed and approved the resulting detailed audit
plan, which ensures that Internal Audit’s areas of focus remain
appropriate and allows for more dynamic audit planning.
• Key controls: Internal Audit introduced a key controls framework
which extended our internal financial controls framework (ICOFR)
across our OpCos to include non-ICOFR processes and controls
(with an undertaking to include head office review procedures in the
next 12 months). Key controls are the procedures in place to contain
internal risks.
We have 77 key controls which we will validate across Airtel Africa.
We will use regular self-assessments and audit validation to
strengthen our control culture while making sure our key controls
continue to operate effectively and as designed.
Internal Audit partners
We believe that a co-sourced internal audit partner helps us access
the technical skills and experience required to deliver on our mandate.
This brings broader industry insights and expertise to help us better
respond to calls for increased and embedded risk management
and control.
The terms of our current partners ended after the delivery of the 2021
financial year audit plan. We began a competitive selection process to
identify the best co-sourcing partner as we continue to build our
internal audit delivery.
Our committee appointed EY as our internal audit partner for the next
four years until financial year 2025, and this was ratified by the Board.
External auditors
Engaging our auditor
Our Audit and Risk Committee manages the relationship with the
external auditor, including assessing their performance, effectiveness
and independence each year and recommending to the Board their
reappointment or removal.
Our external auditor is Deloitte LLP (UK). The lead audit partner is
Mark Goodey, who has been in place since October 2018 and will retire
at the end of Deloitte LLP’s financial year following completion of the
Airtel Africa 31 March 2022 audit. During the forthcoming year we will
identify with Deloitte LLP a partner to suceed Mark Goodey. We’ve
approved their terms of engagement and are fully satisfied with their
performance, objectivity, quality of challenge and independence.
Our next competitive tender is planned for the 2028 year-end audit
in line with current regulation that requires a tender every ten years.
This timetable is subject to annual assessment of Deloitte’s
effectiveness and independence.
There are no contractual obligations which restrict our choice of
auditor, nor is there a minimum appointment period. We’ve complied
with the provisions of the Competition and Markets Authority’s Order
for this financial year relating to audit tendering and the provision
of non-audit services.
Working with our auditor
The lead external audit partner and his team attend our committee
meetings to provide insight and challenge and to report on their review
of the half year results and audit of the year-end financial statements.
To facilitate open dialogue and assurance, we also held private
sessions with our auditor without members of management.
A number of teams are involved in the audit, given the need to report
both our own financial results and to report to our intermediate parent
company, Bharti Airtel Limited.
Throughout the year, audit teams deliver:
• Interim review by Deloitte UK for the Airtel Africa half year
• Signing of the Airtel Africa consolidated financial statements
by Deloitte UK
• Local statutory accounts audited by each Deloitte Africa team,
with some of the work performed by Deloitte India
Effectiveness of the external audit process
The committee and the Board are committed to maintaining the high
quality of the external audit process. We considered and reviewed
the quality and effectiveness of the external audit process throughout
the reporting period. This review is performed each year and aims
to ensure a robust audit and candid feedback and communication
between the auditor and our committee. Its effectiveness depends on
identifying appropriate audit risk and areas of focus at the start of the
audit cycle. Our committee receives a detailed audit plan from Deloitte,
identifying its assessment of these key risks and areas of focus.
For the year ended 31 March 2021 the significant risks identified were
broadly in line with 2020 – with the addition of Airtel Money revenue.
The key risks identified were in relation to going concern, impairment
of goodwill, classification of legal cases, management override of
controls, accuracy of both prepaid and Airtel Money revenue and the
rights and obligations associated with Airtel Money cash. The
significant judgements made in connection with these risks are set out
on page 148. Our committee challenged the work done by the auditor
to test management’s assumptions and estimates around these areas.
We assessed the effectiveness of the audit process in addressing
these matters through the reporting received from Deloitte at the
interim and year end.
108 Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: AuditXandXRiskXcommittee_v59
Modification Date: 26 May 2021 8:23 am
Governance report The committee believes that the learnings from the previous year’s
audit and the resulting actions had a positive impact on the overall
efficiency and effectiveness of the audit across all our operating
countries and regional offices. Deloitte have evolved and improved
their audit approach and communications, challenging the team in
the right areas and providing strong technical expertise. The Deloitte
team was also seen as independent by the Audit and Risk Committee
and management.
We considered the performance of the auditor, based on our own
evaluation and taking into account the assessment of the chief
financial officer, finance team and senior finance personnel on the
effectiveness of the audit process. For the year ended 31 March 2021,
management was satisfied that there had been appropriate focus and
challenge on the primary areas of higher audit risk and assessed the
quality of the audit process to be good. The committee concurred
with the view of management. We concluded that there had been
appropriate focus, critical analysis and challenge by the auditor on key
areas and that Deloitte had applied robust challenge and professional
scepticism throughout the audit.
We’re satisfied that the external audit plan sufficiently addresses
the key risk areas and enables Deloitte UK to meet the requirements
of ISA (UK) 600 to plan and oversee the work performed by
component audit teams.
Next year, we will develop our process to annually assess the
performance of our external auditors and the audit process in general.
Input into this evaluation will be obtained from management and other
key colleagues and the external audit team. The review will focus
on the external auditors’ mindset and culture, skills, character and
knowledge, and the quality of its controls, as set out in the guidance
for audit committees prepared by the FRC.
We recommended to the Board, which in turn will recommend to
shareholders in resolution 16 at our 2021 AGM that Deloitte should
continue as our external auditor.
Auditor independence
We see the independence of our external auditor as one of the
primary safeguards for our shareholders. We reviewed our auditor’s
independence and the scope of the non-audit services and
independence safeguards with Deloitte. Deloitte has confirmed that
in their professional judgement, they are independent and objective
as specified by UK regulatory and professional requirements.
Using our auditor for non-audit services
Where we consider our external auditor to have the most appropriate
experience, technical skills and expertise, in addition to appropriate
safeguards, we may consider using them for non-audit services in line
with a list of acceptable services. Their knowledge of our business may
also make such services more cost-effective and ensure confidentiality.
Our non-audit services policy restricts the provision of non-audit
services as prohibited by the FRC Revised Ethical Standard 2019 and
provides a monetary threshold for approved services. Our committee
reviews and pre-approves any non-audit services with fees above the
threshold or not stipulated by the policy.
Our review of the auditor’s performance during the reporting period
included non-audit services and the ability of Deloitte to maintain its
independence while providing these services. The value of non-audit
services work (half year review work for the Group and quarterly audits
for the Groups’ intermediate parent, Bharti Airtel Limited) for the year
ended 31 March 2021 was $1.4m, representing approximately 24%
of the total auditor’s remuneration as set out in note 8.1 to the
consolidated financial statements on page 173.
Finance Committee
Our Finance Committee is a management operational committee
which is overseen by our Audit and Risk Committee and is subsidiary
to it. Its two independent non-executive director members are also
members of the Audit and Risk Committee.
Given the complexity and importance of finance, treasury and tax
policy matters, the Board has delegated oversight and governance
to this specialist Finance Committee. Our Finance Committee has
strengthened our adherence to the Relationship Agreement and
treasury and tax controls. The committee frames our finance policies
and procedures, creating risk framework mechanisms for treasury
and tax to help achieve our strategic financial goals with a balance
of initiative and risk control.
Committee duties
• Ensures our treasury activities are carried out within an agreed
policy framework
• Ensures activities are within agreed levels of risk and will contribute
to our financial performance through focused management
• Makes sure operations are appropriately funded and conducted
in line with policy
• Ensures the overall treasury objective and the specific objectives
for each main treasury activity are consistent with both financial
and corporate business objectives
• Recommends the strategic tax policy for approval by the Board
• Ensures adequate liquidity to meet financial obligations based
on cash flow forecasts
• Optimises the interest cost on gross debt within prudent risk
parameters
• Determines and approves the derivatives policy on swaps,
foreign exchange and interest rate hedges
• Generates reasonable commercial returns on investments
with approved counterparties to protect investment capital
and ensure desired liquidity
• Minimises the adverse impact of foreign exchange movements
associated with transactions and our operating exposure in
various currencies due to multinational operations
• Maintains diversified access to various local and global debt
and borrowings markets
• Determines and approves our strategic tax planning policies
• Approves new debt and the cancellation and modification
of borrowing and debt facilities
Committee members
Members were appointed by the Board on the recommendation
of the Nominations Committee in consultation with the Audit and
Risk Committee chair. They are Jaideep Paul, CFO, as chair; CEO
Raghu Mandava; deputy CFO Pier Falcione; and two independent
non-executive directors, Ravi Rajagopal and Annika Poutiainen.
We review the composition of the committee and the continued
participation of independent non-executive directors each year.
© 2021 Friend Studio Ltd
File name: AuditXandXRiskXcommittee_v59
Modification Date: 26 May 2021 8:23 am
Airtel Africa plc Annual Report and Accounts 2021
109
Governance report Nominations Committee report
Sunil Bharti Mittal
Chair, Nominations Committee
Attendance
Sunil Bharti Mittal
Chair
Andy Green
Senior independent non-executive director
Ravi Rajagopal
Independent non-executive
(Audit and Risk Committee chair)
Doug Baillie
Independent non-executive
(Remuneration Committee chair)
Meetings
attended
3 (3)
3 (3)
3 (3)
3 (3)
Committee responsibilities
• Reviews the balance, diversity, independence and effectiveness
of the Board
• Oversees the selecting, interviewing and appointing of new
Board members
• Reviews succession and contingency planning for the Board
and senior leadership, including training, development and
talent management
• Makes recommendations to the Board about the continued
service of directors, including suspensions and terminations
of service
• Makes sure directors disclose the nature and extent of any
actual or potential conflicts of interest, monitors and assesses
these disclosures and makes recommendations to the Board
as appropriate
• Oversees, with the chair of the Board, an annual evaluation of
Board, committee, and director performance – in particular,
determines with the chair whether this evaluation should be
externally facilitated and, if so, the nature and extent of the
external evaluator’s contact with the Board, committees and
individual directors
• Oversees policy and objectives on gender and ethnic diversity
and inclusion in light of our strategy, objectives and culture – and
monitors the implementation of policies and progress towards
objectives at all levels of our business
• Through the committee chair, engages with shareholders
on subjects relevant to committee responsibilities
Chair’s statement
I’m pleased to present the Nominations Committee report for 2020/21
and to share our plans for the coming year.
Airtel Africa is a multicultural business and this is reflected within our
leadership teams. The ethnic diversity of our Board reflects the
diversity of our employees, which is one of the core strengths of our
Group. We remain committed to ensuring diversity in terms of culture,
age, gender, ethnicity, length of service and educational background –
and are building an inclusive and diverse workplace.
The primary responsibility of this committee is to focus on Board
composition and succession planning. We work to ensure that our
Board is made up of people with the appropriate drive, abilities,
diversity in its broadest sense, and experience to lead Airtel Africa in
delivering on our strategy. We oversee succession planning for senior
management to ensure we have a consistent pipeline of diverse talent
in place for progression to the Board.
Changes to the Board
During the year, our committee oversaw the appointment of Kelly
Bayer Rosmarin, a nominee of Singtel who became a non-independent
non-executive director when Arthur Lang stepped down from the
Board in October. Kelly is known for her skills in using technology, data
and analytics to develop a leading customer experience. A search firm
were not used due to this being a Relationship Agreement appointment.
On behalf of the Board, I would like to thank Arthur, who joined us
in October 2018 and supported Airtel Africa through its IPO, for his
significant contribution to our success in building Airtel Africa into a
market-leading mobile service provider. I wish him well for the future.
We announced in April 2021 that Segun Ogunsanya, managing
director and chief executive officer of Airtel Nigeria, is to succeed
Raghu Mandava as managing director and chief executive officer
of Airtel Africa plc following Raghu’s informing of the Board of his
intention to retire. Segun will join the Board of Airtel Africa plc with
effect from 1 October 2021.
We are delighted to appoint Segun as the Group’s next chief executive
officer. He has displayed significant drive and energy in turning around
the Nigeria business by focusing on network modernisation,
distribution, and operational efficiency.
Jaideep Paul, chief financial officer, has also been appointed as an
executive director and will join the Board of Airtel Africa plc with effect
from 1 June 2021.
We will report fully on these changes in our 2021/22 Annual Report.
We’re privileged to have a Board of directors with a broad range
of skills, experience, age and nationality to perform such a vital role.
This diversity is invaluable in developing our business strategy and
enhancing our governance capabilities. As you can see from the
biographies on pages 82-84, our committee chairs and members
have recent and relevant skills, experience and expertise.
Evaluating our management
As part of our corporate governance review each year, we examine the
independence and diversity of our Board and the balance of skills and
development needs of members.
This year, we identified the competencies most likely to become
increasingly important for Airtel Africa Board members which will
strengthen the overall balance of our Board. We used this profile to
evaluate the experience and capabilities of our current non-executive
directors.
110 Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: NominationsXcommittee_v36
Modification Date: 26 May 2021 8:02 am
Governance report In mapping the skillsets of our Board members against our current
strategy and annual operating plan, we confirmed that our non-
executive directors have significant experience in the areas of strategy,
risk management and M&A. We recognised a need to strengthen our
digital, IT and fintech capabilities – and appointed Kelly Bayer Rosmarin
to this end.
Our committee also monitors the succession planning for
management immediately below the Board. In setting out succession
plans for his executive team, the CEO shared with our committee
his vision for the structure and evolution of the management team.
In light of this, we reviewed our succession plans and contingency
arrangements, as well as the strength of the senior management
team. One of our priorities is to support and encourage the
professional growth of our colleagues, and we continued our work to
identify executives with potential and to encourage their development.
Improving our diversity
We’re also focused on improving diversity and inclusion across our
business, starting with gender balance. As of the date of this report,
26% of the total company were women, with 23% of our OpCo
Executive Committee women. While the gender ratio at Airtel Africa
is improving, we still have some way to go and are working towards
our targets in this area. For more details see page 114.
I welcome questions from shareholders on this committee’s activities.
If you’d like to discuss any aspect of this report, please contact me
through our company secretary, Simon O’Hara (see page 219 for
contact details). I will, of course, be attending the 2021 AGM and
look forward to the opportunity to meet you and answer your
questions there.
Sunil Bharti Mittal
Chair, Nominations Committee
About the committee
Led by the chair of our Board, our committee consists of independent non-executive directors. Our CEO and HR director were also invited to
attend committee meetings and submit reports.
We met formally four times during the 2020/21 financial year. Our primary focus was on longer-term succession planning for the senior executive
team, improving diversity across our business, and the induction of Kelly Bayer Rosmarin.
Having reviewed the composition and performance of the Board and its committees, we believe our Board has the experience, expertise and
appetite for challenge to take Airtel Africa forward in line with our strategy while maintaining good governance. We will, of course, keep this under
regular review.
2020/21 committee priorities
To review the Board’s composition, balance,
diversity, skill sets, individual directors’ time
commitments and overall effectiveness
against future needs
Activities and progress
July to October 2020
Board
We began the process to appoint two new women as non-executive directors to the Board by
the financial year-end – looking specifically for appointees with digital, fintech and customer
electronics experience, as well as a solid UK plc listed background.
We appointed Kelly Bayer Rosmarin as nominee of Singtel to replace Arthur Lang, who stepped
down. See page 110 for more detail. We also expect to announce the appointment of a fourth
woman to the Board in the first half of the 2021/22 financial year.
Audit and Risk Committee
Awuneba Ajumogobia was invited to join from October – this role is in addition to her
responsibilities on the Remuneration Committee.
October 2020
We reviewed the base fee payable to non-executive directors to reflect the additional time
required by multiple committee memberships. Benchmarking data confirms that these fee
arrangements are competitive.
January 2021
We appointed Paul Arkwright as special adviser to the chair and Board on our strategy in Africa,
with a focus on political, legal and regulatory issues.
Recommending re-election
After considering the Board review and the independence, skills contribution and judgement
of non-executive directors, we recommended to the Board that each director be proposed for
re-election (or election) by shareholders at the July 2021 AGM.
© 2021 Friend Studio Ltd
File name: NominationsXcommittee_v36
Modification Date: 26 May 2021 8:02 am
Airtel Africa plc Annual Report and Accounts 2021
111
Governance report Nominations Committee report continued
2020/21 committee priorities
To review our succession and contingency
planning across the business, linking this
to individuals’ professional development
at senior management level and
developing a diverse pipeline of talent
To ensure progress against our diversity
and inclusion agenda across all levels
of the business
Activities and progress
Executive succession planning
July 2020
Senior management team: The CEO provided an account of the performance, potential and
immediate succession plans for each of his direct reports. We discussed each role and offered
appropriate challenge to each of the recommendations. We discussed how to use the skills
of our OpCo managing directors to plug gaps, mitigate risks or to realise people’s potential.
We also identified particular performance challenges and potential remedies.
October 2020
The chair advised that Egon Zehnder had been retained to support our executive succession
planning and assessment.
January 2021
Executive management team: The CEO set out longer-term succession plans for our executive
and regional executive management teams. In doing this, he shared his vision for the future
structure and evolution of the management team. We reviewed the succession plans,
contingency arrangements and strength of the executive team.
To pinpoint potential and development needs, Egon Zehnder assessed the competencies, skills
and experiences required for an Airtel Africa executive and applied this to the executive team.
This revealed that there is some exceptional talent within the business and identified individuals
suitable for CEO succession planning.
ExCo members were given direct access to the Board, including the chance to attend Board
meetings and other Board-related functions – this also helps us assess the strength of our
management team.
Our priority is to increase the number of women at senior levels in our regional businesses by
setting new targets to increase the number of women in leadership positions by 2026 and to
achieve gender-balanced shortlists. We will ensure that the specification for any new senior
management role is equally suited to applicants of any gender and that there’s no discrimination
at any stage in the selection process on any applicant characteristic. During the year we
appointed three women to senior roles in our operating companies – customer experience
director Zambia, enterprise director Nigeria and enterprise director for Zambia.
Committee priorities for 2021/22
2021/22 priorities
Identifying key prospects and tailoring development plans to help senior management demonstrate their potential for progression
Reviewing our policies and processes to promote diversity in our operating country Boards and senior management teams and putting in place
a development programme for suitable internal candidates
Attracting diverse, highly skilled and talented employees by:
• Tackling unconscious bias
• Maintaining a gender balance on shortlists for management positions
• Ensuring all recruiters have signed the Standard Voluntary Code of Practice
Retaining the best talent by:
• Promoting a good work/life balance
• Encouraging equal opportunities for all
112 Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: NominationsXcommittee_v36
Modification Date: 26 May 2021 8:02 am
Governance report Developing our Board
The ongoing development of our Board members is a priority. We
inform directors about relevant seminars and training and encourage
and support their attendance. We also provide regulatory updates at
each Board meeting and specialist advisers brief our committees on
topics such as changes to accounting procedures and UK corporate
governance. Our Board undertook a series of development activities
during the reporting period.
Board
November 2020
Board sustainability workshop.
Our corporate legal advisers Herbert Smith Freehills provided training
on the political environment, governance reform, liability to investors
and directors’ duties.
Kelly Bayer Rosmarin’s induction
Kelly Bayer Rosmarin was inducted through a series of sessions with
our CEO, CFO and members of our Executive Committee. These
focused on our strategy, operating and financial performance, budget
and forecasts, human resourcing, diversity challenges and medium-
term plans. Presentations to Kelly by the heads of key departments
such as Compliance, Internal Audit and HR on their initiatives,
challenges and plans are also planned.
October 2020
Kelly met with each of the chair of the Board, the senior independent
director and the company secretary
Joined a Board training session on directors’ duties
November 2020
Meetings with the members of the ExCo
January 2021
Met with our corporate lawyers Herbert Smith Freehills for directors’
onboarding training
April 2021
Presentations by the heads of key departments
Q1 2021
Will meet with our external auditor, Deloitte UK
During the year, the committee reviewed the induction programme
for directors and considers this appropriate.
Workforce engagement
To engage with our workforce and understand the business at all
levels, all directors are encouraged to regularly visit our local
operations, either in person or through online meetings. To this end, we
arrange Board visits each year to operations – and at least one Board
meeting is scheduled to take place at a regional location with
representatives from the business present. Due to pandemic-related
travel restrictions in 2020/21, we cancelled a number of large
meetings, meaning Board members were unable to visit local
operations in person. They were able to attend online meetings with
senior executives and functional heads as necessary.
The Board considered the primary outcomes of our company-wide
engagement survey at its March 2021 meeting. The survey showed
that, on the whole, our people feel clear on the goals of the company
and see leader behaviors as consistent with our values. They feel clear
about the Code of Conduct. There’s a strong sense of collaboration,
and people generally feel that managers help remove obstacles
and give useful feedback. These are our areas of strength when
benchmarked against other global telecoms companies. We’re now
focusing on improving our recognition and reward schemes and
empowering people in light of survey results.
Our open-door policy continues, so that employees can connect
directly with our CEO or any ExCo director about anything. We
continue to hold CEO-led quarterly town hall sessions as a platform
to increase awareness and demonstrate our values from the top.
For more on how we engaged with our people during the reporting
period, see page 34.
Annual Board evaluation
See pages 97-99 for details of how this evaluation was conducted,
actions taken and plans to address its outcome.
Board and committee balance, diversity,
independence and effectiveness
The chair of the Board is responsible for making sure independent
non-executive directors are able to constructively challenge executive
directors, while supporting them to implement the strategy and run
the business effectively. He works with this committee to make sure
the Board has the right blend of skills, independence and knowledge.
Appointing and re-electing directors
The Board has the power to appoint additional directors or to fill any
vacancy. Every director will seek election or re-election at our annual
AGM. All directors will stand for re-election at each year’s AGM while
in office.
Each director proposed for re-election (or election) at our AGM has
been unanimously recommended by other members of the Board.
More information on our appointments process is on page 117.
Effectiveness: advice available to the Board
All directors have access to the advice and services of the company
secretary. Directors may also take independent professional advice
at our expense where this is judged necessary to fulfil their
responsibilities. During the year, the Board took advice from:
• Alvarez & Marsal through the Remuneration Committee, as
explained in more detail on page 118
• Our corporate legal advisers Herbert Smith Freehills through the
Market Disclosure Committee on the identification of insider
information
• Legal advisers Clifford Chance on share plan and remuneration
policy matters
• Our brokers on the telecoms sector and the relative performance
of our share price
Diversity
The Board represents a broad range of skills, experience, age, ethnicity,
gender and nationality. Our youngest director is 33 and our members
reflect the ethnic diversity of Airtel Africa. Most have spent a
considerable amount of time living outside the UK, and this range
of experience is invaluable in developing our business strategy and
enhancing our governance capabilities.
Our policy is to appoint and promote the best person for each role
without regard to age, gender, ethnicity or disability – only considering
factors such as educational and professional backgrounds as
appropriate for the position. This applies to the entire business,
including the Board. Our objective is to build diversity into our
appointment and promotion processes at every level. All Airtel Africa
employees have completed our annual Code of Conduct training
and certification, which covers our commitments on diversity,
inclusion and anti-discrimination.
© 2021 Friend Studio Ltd
File name: NominationsXcommittee_v36
Modification Date: 26 May 2021 8:02 am
Airtel Africa plc Annual Report and Accounts 2021
113
Governance report Nominations Committee report continued
We believe diversity is fundamental to the successful operation of
our Board and to creating a balanced culture across our business.
The Board regularly reviews its balance and composition considering
targets and recommendations for gender diversity, as well as the
Parker Review and its report into ethnic diversity. We are an ethnically
diverse Board and have exceeded the Parker Review target for FTSE
250 boards to have at least one director from an ethnic minority
background by 2024. We fully endorse the Hampton-Alexander
Review’s approach to increasing senior leadership diversity, including
its voluntary target of 33% women on Board, executive committee
and senior management teams.
While we haven’t yet achieved this gender-balance target at Board
level, we are making considerable progress. 27.3% of our Board are
women (3 out of 11) representing 33% of our independent directors
(2 of 6). Our committee has been working to identify women leaders
as potential Board members and we hope to be able to announce
further progress this year.
Our Executive Committee gender diversity remains a challenge. We’re
working to increase the number of women at this level as well as in
our senior management teams (direct reports to the ExCo) by 2026.
For more on this see below.
Diversity and inclusion are, and will continue to be, a key focus for
Airtel Africa.
Gender balance
As at 31 March 2021, the gender balance of the Group’s employees
was as follows (%):
Category
Group Board
Group Executive Committee
Member
OpCo Executive Committee
Senior and middle management*
All other employees
Total
Women (%)
3
(27%)
1
(7%)
36
(23%)
121
(19%)
767
(28%)
925
(26%)
Men (%)
8
(73%)
13
(93%)
123
(77%)
525
(81%)
1,940
(72%)
2,601
(74%)
Total
11
14
159
646
2,707
3,526
* Senior management is all general managers and above excluding the OpCo
Executive Committee, and middle management includes all employees at
senior manager level
Pay ratio reporting
Quoted companies with more than 250 UK employees are required to
report each year on the difference in pay between their CEO and their
UK employees. As Airtel Africa is outside the scope of this requirement,
we will not be disclosing our pay ratio for this reporting period.
Our diversity policy
Purpose
Diversity and inclusion are a part of who we are and how we do
business – wholly in line with our values of being alive, inclusive
and respectful.
Policy statement
We recognise that a diverse workforce is key to delivering value to
our customers. So we work to create an inclusive environment that
embraces our differences and helps employees work to their true
potential. Our practices and policies to foster this include global
mobility, talent acquisition and focused learning and development.
We’re particularly focused on developing women in management
and leadership roles and across our business.
Initiatives
1. Searching for and using diverse talent pools for all management
and senior leadership recruitment
2. Building succession and leadership development plans that
encourage the promotion of women
Initiatives announced last year which will be launched
in 2021/22
1. CEO’s Women in Leadership council
2. A women’s entrepreneurship programme to increase the
percentage of self-employed women in sales and distribution
roles
Training and awareness
1. Rolling out a programme to counter unconscious bias
2. Using town hall sessions to drive awareness and the right tone
from the top
3. All employees completing yearly Code of Conduct training and
certification covering our commitments on diversity, inclusion
and anti-discrimination
Monitoring and reporting
1. Monthly diversity review by our CHRO with HR directors of our
regional businesses
3. Focused mentoring programmes for women
2. Quarterly progress reports to our Executive Committee
4. Facilities for expectant and new mothers, such as reserved
3. Quarterly progress reports to our management HR Committee
parking and mothers’ rooms
114 Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: NominationsXcommittee_v36
Modification Date: 26 May 2021 8:02 am
Governance report Our compliance with the UK Corporate Governance Code
The Board has set a clear
commitment to high standards
of corporate governance for the
Group – and we demonstrate this
commitment by the way in which
we conduct business and carry
out our responsibilities.
Simon O’Hara
Group company secretary
As Airtel Africa plc ordinary shares have
been trading on the main market of the
London Stock Exchange since 3 July
2019, we apply the principles and
provisions of the 2018 UK Corporate
Governance Code (the Code) and
explain any non-compliance. (see the
Code at frc.org.uk). While we have a
secondary listing on the Nigerian Stock
Exchange, we are permitted by the NSE
Listings Requirements to follow the
corporate governance practices of our
primary listing market in London.
The UK Financial Reporting Council
(FRC) promotes high quality corporate
governance and reporting through
the Code, with which all companies
with a premium listing on the UK Stock
Exchange must either comply in full or
explain why and to what extent they
do not comply. Between 1 April 2020
and 31 March 2021, we applied the
principles and complied save for two
provisions of the 2018 Code (provisions
9 and 41) – see page 91 for details.
This section explains how we have
applied the Code principles.
1. Board leadership and company purpose
A. An effective and entrepreneurial board
Our Board is responsible for Airtel Africa’s system of corporate
governance. As such, directors are committed to developing and
maintaining high standards of governance that reflect evolving
good practice.
The Board provides strategic and entrepreneurial leadership within
a framework of strong governance, effective controls and an open
and transparent culture; this enables opportunities and risks to be
assessed and managed appropriately. Our Board also sets our
strategic aims and risk appetite, makes sure we have the financial
and human resources in place to meet our objectives, and monitors
our compliance and performance against our targets. And finally,
the Board ensures we engage effectively with all of our stakeholders
and considers their views in setting our strategic priorities.
Roles and responsibilities
We have well-documented roles and responsibilities for directors, and
a clear division of key responsibilities between our chair and CEO to
help maintain a strong governance framework and the effectiveness
of our Board. Our clearly defined policies, processes and procedures
govern all areas of the business, and these will continue to be reviewed
and refined to meet business requirements and changing market
circumstances.
We re-examine budgets in light of business forecasts throughout
the year to make sure they are robust enough to reflect the possible
impact of changing economic conditions and circumstances. We
conduct regular reviews of actual results and future projections
compared with the budget and prior year results, as well as with
various treasury reports. We monitor any disputes that could lead
to significant litigation or contractual claims at each Board meeting,
with updates tabled by the company secretary.
We have a Board-approved framework of delegated authority to
identify and monitor individual responsibilities of senior executives.
B. Purpose, values and strategy and alignment with culture
Our Board believes that a healthy culture protects and generates value
and that our employees’ engagement with our values and culture will
lead to the successful delivery of our strategy. It is responsible for
defining our values and setting clear standards from the top. Our chair
leads the way on this by ensuring our Board operates correctly and
with a clear culture of its own which can be promoted to our wider
operations and dealings with all stakeholders. Our CEO, with the help
of the CFO and his management team, is responsible for the culture
within our wider operations. To meet the challenges to maintaining our
culture brought about by pandemic working restrictions, we have
stayed connected to each other through regular departmental
check-ins and daily online team meetings. We’ve continued to build our
people capability through enhancing our online learning platform for
greater access, encouraging skills development through short-term
assignments and exchanges between operating companies, and
ensuring all employees have mandatory training in compliance
areas such as our Code of Conduct, anti-bribery and corruption,
and information security.
Last year, we reported that we intended to include a report from our
chief HR officer on culture, diversity and inclusion as a standing agenda
item at future Board meetings. In 2020/21, the Board received this
report via the Remuneration Committee meetings attended by our
chief HR director. Doug Baillie, chair of the Remuneration Committee
communicated this update in his report to the Board. This year the
planned Board agenda item was superseded by Covid-19-related
reporting at each meeting. We intend to include this HR report
at all Board meetings from May 2021.
To meet its 2020/21 objective of executing our Group purpose, values
and general strategy and objectives and assessing and monitoring the
Airtel Africa plc Annual Report and Accounts 2021
115
© 2021 Friend Studio Ltd
File name: ComplianceXwithXcode_v36
Modification Date: 26 May 2021 8:09 am
Governance report Our compliance with the UK Corporate Governance Code continued
Group’s culture and promoting the alignment of culture with purpose,
values and strategy, our Board:
• Reviewed our strategy for Board and executive-level succession
planning and put into place plans for achieving this (Nominations
Committee). For more on this see page 110
• Established Transforming Lives as our corporate purpose
• Continued to form strategic partnerships which support and drive
forward our ambition to transform lives through greater financial
inclusion and empowerment across the African continent
• Reinforced our commitment to achieve a more gender-balanced
workforce
In 2021/22, the Board will continue to ensure our resourcing –
including capital, finance and people – is sufficient to achieve our
strategy while continuously improving performance and diversity.
While our leadership establishes our culture and leads by example, our
clear policies and Code of Conduct ensure that our obligations to
shareholders and other stakeholders are clearly understood and met,
as described in more detail on page 32.
C. Company performance and risk management
Our CEO manages the Group’s business in line with the strategic plan
and approved risk appetite and takes responsibility for the operation
of the internal control framework. Our Audit and Risk Committee
oversees potential risks and provides the Board with strategic advice
on current and potential future risk exposures. Our risk management
framework supports informed risk-taking by our businesses, setting
out the risks that we’re prepared to be exposed to and the risks that
we want to avoid.
More information on risk management can be found on page 107
D. Stakeholder engagement
Our Board members take an active role in engaging with shareholders
and wider stakeholders. Our director induction process includes
directors’ duties under section 172 of the Companies Act 2006.
The Board regularly receives feedback on shareholder sentiment and
sell-side analysts’ views of our business and the wider industry. Our
Investor Relations team and management have frequent contact with
the five equity research analysts who follow Airtel Africa.
In October 2020, the Remuneration Committee on behalf of the Board
wrote to our top 20 investors to provide further details of how our
remuneration policy was being applied in 2020/21, including details on
salary increases and the difficulty of setting targets and metrics until
the impact of Covid-19 was clear. Our aim is to better embed
stakeholder considerations in Board decision-making,
In March 2021, as part of the preparation for the launch of our
sustainability strategy we consulted with our priority stakeholders:
representatives from our investors, customers, partners, operating
country Boards and NGOs. Our aim was to consider stakeholder
concerns when developing our sustainability strategy, as advised by
the Global Reporting Initiative (GRI). Under the GRI framework, an
organisation is required to identify its stakeholders, and explain how it
has responded to their reasonable expectations and interests.
Considering the input of stakeholders when creating our sustainability
strategy strengthens our strategy and reporting.
Our Board discusses the impact of all major decisions on our workforce
before drawing its conclusion. We also consider stakeholder impact in
relation to material acquisitions and strategic expansion. Factoring the
needs and concerns of our stakeholders into Board discussions and
decisions is in accordance with section 172 of the Companies Act
2006 (see statement on page 32).
Sunil Bharti Mittal is our designated Board director for employee
engagement, given his regular travel to our operating companies.
More on our approach to stakeholder engagement can be found on
page 32 of the strategic report
116 Airtel Africa plc Annual Report and Accounts 2021
E. Workforce policies and practices
We expect all businesses and employees to work with the highest
standards of integrity and conduct at all times. Our Code of Conduct,
which can be found on our website, sets out our expectations in detail.
We also have policies focused on anti-bribery and corruption,
whistleblowing and data protection (GDPR) setting out the ethical
framework that all companies and employees are expected to follow.
Each year, our employees receive up-to-date training on legislative and
regulatory matters.
Our management processes and divisions of responsibility are detailed
in the following documents, which can be seen on our website:
• Schedule of matters reserved for Board decisions, including profit
expectations and dividend policy
• Terms of reference for Audit and Risk, Nominations and
Remuneration Committees
• Policies covering operational, compliance, corporate responsibility
and stakeholder matters, including ones related to the Bribery Act
2010 and anti-corruption – these are updated as necessary in line
with developments in corporate governance and legislation
• Our Articles of Association
Our policies are reported against to the Board and/or Audit and Risk
Committee by the head of internal audit, chief compliance officer or
the company secretary.
A description of our whistleblowing procedures is set out on page 107.
2. Division of responsibilities
F. Role of the chair
The roles and responsibilities of the chair and the CEO have been
clearly defined, set out in writing and signed by Sunil Bharti Mittal and
Raghu Mandava.
The chair leads our Board and is responsible for its overall
effectiveness in directing the company.
Our chair and the senior independent director hold separate meetings
at least once a year with non-executive directors without the CEO
present. Each did this once during the 2020/21 reporting period. Led
by the senior independent director, the non-executive directors also
meet at least once during the year without the chair being present to
appraise his performance. The chair also met formally with
independent non-executive directors without our CEO or other
non-executive directors present. Through these meetings, the chair
ensures we maintain a fair and open culture where all Board members
are able to make a strong contribution.
The Board has concluded that Sunil Bharti Mittal did not meet the
independence criteria of the Governance Code when he was
appointed, due to his interests in the company. However, in light of his
extensive involvement with Airtel Africa and the Bharti Airtel Group
over many years, the Board has considered his major contribution to
the company’s growth and success and unanimously agrees that his
continued involvement is crucially important to our ongoing success.
The Board has a number of safeguards in place to ensure robust
corporate governance during his tenure as chair, including Andrew
Green in position as a strong senior independent director.
The Board believes Sunil Bharti Mittal continues to effectively oversee
our leadership and maintain a balanced shareholder agenda.
G. Composition of the Board and division
of responsibilities
Our Board consists of 11 directors: non-executive chair Sunil Bharti
Mittal, who is not independent, CEO Raghu Mandava, six independent
non-executive directors and three non-executive directors. Andrew
Green, CBE, is the senior independent director and Simon O’Hara is
our Group company secretary. For more on our Board composition,
see page 82.
© 2021 Friend Studio Ltd
File name: ComplianceXwithXcode_v36
Modification Date: 26 May 2021 8:09 am
Governance report The Board has an established framework of delegated financial,
commercial and operational authorities which define the scope and
powers of the CEO and of operational management.
For more on our Board and executive roles, pages 82-87
H. Role of non-executive directors
Our independent non-executive directors offer advice and guidance to
the CEO and CFO, drawing on their wide experience in business and
diverse backgrounds. They also provide a constructive challenge and
hold management to account – monitoring the overall direction and
strategy of the company, scrutinising the performance of the CEO and
CFO, and ensuring the integrity of the financial information made
available to the Board and our shareholders. They play an important
part in general succession planning for the Board and other executive
and senior management positions.
The senior independent director and the independent directors also
play a critical role in fulfilling the requirements of the separation
governance framework and ensuring Airtel Africa’s independence.
Following their appointment, each of our non-executive directors
(both independent and non-independent) received an induction that
focused on the culture, operational structure and key challenges of
Airtel Africa. Details of this induction are on page 113.
I. Board processes and role of company secretary
We have a range of processes in place to make sure our Board is fully
informed in a timely manner to be able to meet its duties. Directors
receive papers before each Board and committee meeting. This allows
them to prepare for meetings and also to send in their views if they’re
unable to attend.
The CEO also sends updates to members on important issues
between meetings; and members receive a monthly report on key
financial and management information, as well as regular updates on
shareholder issues and analysts’ notes. This information is distributed
through a secure online portal.
All directors have direct access to the advice and services of the
company secretary, and non-executive directors are able to take
independent legal advice at our expense when necessary to fulfil their
duties to the company.
3. Composition, succession
and evaluation
The recruitment process begins by evaluating the balance of skills,
knowledge and experience of existing Board members, the diversity of
the Board and the ongoing requirements and strategic developments
of the business. This enables us to focus our search process on
appointing a candidate who will complement and enhance the Board’s
effectiveness and overall performance.
When necessary, the committee will use the services of a professional
search firm to identify appropriate candidates. The committee will only
choose firms that have adopted the voluntary code of conduct
addressing gender diversity and best practice in search assignments.
We retained no such firm during the reporting period.
We review a long list of globally drawn potential candidates and
shortlist candidates for interview based on the objective criteria set out
in the agreed specification – this addresses the strategic requirements
of the Group; the balance of skills, knowledge and experience of
current members; and the diversity of the Board. Non-executive
appointees must be able to show that they have time available to
devote to the role, and before being appointed all candidates must
identify any potential conflicts of interest.
Shortlisted candidates are interviewed by the committee chair, other
committee members and the CEO. The committee then recommends
the preferred candidate, who is invited to meet other Board members.
Finally, the committee takes up detailed external references before
making a formal recommendation to the Board for appointment.
Andy Green took on the role of chair at Gentrack Group Limited (NZX/
ASX-listed) in October 2020. No other director took on a significant
new appointment during the year.
Before accepting the appointment, Andy discussed with the chair and
our company secretary an indication of the anticipated time
commitment and agreed that he would continue to have sufficient
time to give to his Airtel Africa Board duties.
For more on our Nominations Committee’s activities and processes,
see page 110
K. Skills, experience and knowledge of the Board and
its committees
We have an engaged and diverse Board who reflect the cultural and
ethnic diversity of the countries in which we operate. Our Board
members bring a range of practical experience and deep expertise
to our business – and at least half of our directors, excluding the chair,
are independent non-executive directors, in line with the Code’s
recommendations. While not an executive director, our CFO attends
all Board and Audit and Risk Committee meetings.
J. Board appointments
As part of our 2020/21 Board evaluation, we reaffirmed that each of
our independent non-executive directors is independent in character
and that there are no relationships which could affect their judgement.
The Board considers that each director brings relevant and
complementary skills, experience and background to the Board,
details of which are set out in the biographies on pages 82-84 and the
Board skills matrix on page 85.
The main objective of our Nominations Committee is to ensure that we
have the best possible leadership team by overseeing a formal,
rigorous and transparent process for appointing and removing
directors to or from the Board, our committees and other senior roles.
The committee also works with the aim of improving diversity and
developing our succession-planning processes. During the reporting
period, Kelly Bayer Rosmarin was appointed to the Board and
Awuneba Ajumogobia joined the Audit and Risk Committee.
We remain non-compliant with Provision 9 – non-independence of our
chair on appointment, and our position is explained on page 91.
Our appointment process
When considering the recruitment of new members of the Board, the
Nominations Committee adopts a formal and transparent procedure
which considers the skills, knowledge and level of experience required,
as well as diversity.
L. Board evaluation
As part of good governance, it’s important to make sure our Board as a
whole, its committees and each director is operating and performing
effectively. While the Code requires an externally facilitated evaluation
at least every three years, we have chosen to do this in each of the two
years since our listing to enable us to plan effectively for the future.
In 2020, we again engaged Linstock to facilitate this evaluation – a
completely independent advisory firm specialising in Board
performance reviews. All Board members and our company secretary
were invited to complete an online survey on the performance of the
Board, its committees and the chair, as well as their own contributions
to the Board. The survey was completely anonymous to promote an
open and frank exchange of views.
See pages 97 for details
© 2021 Friend Studio Ltd
File name: ComplianceXwithXcode_v36
Modification Date: 26 May 2021 8:09 am
Airtel Africa plc Annual Report and Accounts 2021
117
Governance report Our compliance with the UK Corporate Governance Code continued
Last year we reported non-compliance with Provision 36 which states
that the Remuneration Committee should develop a formal policy or
post-employment shareholding requirements encompassing both
unvested and vested shares. At that time, the committee considered
that, in light of the company’s unusual circumstances, with senior
executives located in Africa where additional requirements on the
holding of shares are not market practice, the operation of bonus
deferral and post-vesting holding requirements provided sufficient
alignment after employment has ended. However, in response to
shareholder feedback and clarifications from the FRC on compliance
with the UK Corporate Governance Code, the Remuneration
Committee has introduced a formal post-employment share
ownership requirement.
For details of our share ownership policy, see page 128
Provision 32 Remuneration Chair – prior service
Doug Baillie has now served as our Remuneration Committee chair for
over two years since being appointed to the Board in April 2019. The
Board confirms that Doug has since displayed the skills and experience
required for the role and has the full support of the Board. Accordingly,
we will no longer report against this provision.
Provision 41 engagement with the workforce
During the year, the Remuneration Committee did not engage
systematically with our people to explain how executive remuneration
aligns with wider company pay policies.
Q. Procedure for developing remuneration policy
In 2019/20, we thoroughly reviewed the remuneration arrangements
for our directors. Our goal was to make sure our new policy would
incentivise our management team to deliver longer-term shareholder
value. We also wanted to make sure this reflected the latest Code
requirements and was in line with UK good practice. Having consulted
on with our largest shareholders who indicated their support, the
policy was adopted at the 2020 AGM.
R. Exercising independent judgement
In the year ended 31 March 2021:
• Alvarez & Marsal provided remuneration advice and benchmarking
data to our Remuneration Committee. Alvarez & Marsal was
appointed by the committee in light of their experience and
expertise in independent remuneration advisory work
• Clifford Chance provided legal advice in relation to share plan
matters and remuneration advice to our Remuneration Committee.
Clifford Chance was appointed by the committee in light of their
experience and expertise in the areas of advice sought
The committee uses its discretion, within the maximum policy limits,
to consider the target bonus taking account of market development
opportunities, specific events and evolving roles. While the committee
has the discretion to change the metrics and weighting for the bonus
plan from year to year, we normally consult with major shareholders
before making any significant changes.
See our remuneration report on pages 124-138 for more detail
4. Audit, risk and internal control
M. Independence and effectiveness of internal and
external audit
During 2020/21, we enhanced our control environment through
a robust risk assessment and review led by our Audit and Risk
Committee. This identified the key risks to be reviewed and assessed
by Internal Audit as part of its programme of work during the year.
During the year, a number of initiatives were undertaken by Internal
Audit to ensure that it continues to meet both current good practice
and the evolving needs of Airtel Africa. We introduced our new controls
framework (ICOFR) and performed an audit needs assessment to
inform our internal audit strategy. We also enhanced our internal audit
risk assessment process to allow for better coverage and more
dynamic audit planning.
During 2020/21 Deloitte UK performed an external statutory audit of
year end 31 March 2020, and a half-yearly review. See page 108 for a
discussion of their independence and effectiveness.
For more on the activities and processes of our Audit and Risk Committee,
see pages 100-109
N. Fair, balanced and understandable assessment
Pages 14-15, 22-23, 24-31 and 72-78 of the strategic report set out our
performance, business model and strategy, as well as the risks and
uncertainties relating to the company’s future prospects. When taken
as a whole, the directors consider this Annual Report is fair, balanced
and understandable and provides information necessary for
shareholders to assess our performance, business model and strategy.
The directors made their assessment following the Board’s review of
the document at its meetings on 29 March, 7 May and 11 May 2021.
O. Risk management, internal control and determining
principal risks
As highlighted in the strategy and risk sections of the strategic report,
risk management is inherent to our management thinking and
business planning processes. The Board has overall responsibility
for establishing and maintaining our risk management and internal
control systems. Our Audit and Risk Committee supports the Board in
reviewing the effectiveness of our internal controls, including financial,
operational and compliance, as well as our risk management systems.
For more on the activities and processes of this committee,
see pages 100-109
5. Remuneration
P. Remuneration policies and practices
Our proposed policy is intended to attract, motivate and retain
high-calibre directors, to promote the long-term success of Airtel
Africa, and to be in line with best practice and the interests of our
stakeholders. There are two key principles of our remuneration policy.
One, the structure of remuneration packages and, in particular, the
design of performance-based schemes, should be aligned with
stakeholders’ interests and support our business strategy and
objectives. And two, the performance-based element of remuneration
should be appropriately balanced between the achievement of
short-term objectives and longer-term objectives.
Our directors’ remuneration policy (DRP) which sets out our policy for
paying our CEO, chair and non-executive directors was approved by a
binding shareholder vote at our 2020 AGM. Raghu Mandava
is expected to reach the minimum shareholding target as soon as
reasonably possible. A minimum requirement of 250% of salary will
apply while he is in employment.
118 Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: ComplianceXwithXcode_v36
Modification Date: 26 May 2021 8:09 am
Governance report Directors’ report
About this report
The directors of Airtel Africa present this report
together with the audited consolidated financial
statements for the year ended 31 March 2021.
This report has been prepared in accordance with the
requirements outlined in the Companies Act 2006, The Large
and Medium-sized Companies and Groups (Accounts and
Reports) Regulations 2008 and forms part of our management
report as required under Disclosure Guidance and
Transparency Rule (DTR) 4. Certain information that fulfils the
requirements of the directors’ report can be found elsewhere in
this document and is referred to below. This information is
incorporated into this directors’ report by reference.
The directors’ report comprises sections from pages 82-118
and 124-138 of the governance report, and this report on pages
119-122. Other relevant information which is incorporated by
reference can be found in the strategic report:
• Financial performance on page 62
• Business environment on page 18
• Outlook and financial management strategies, including
particulars of any important events affecting the company
since the year-end (with subsidiary undertakings included in
consolidated statements) on pages 1-80 and in note 36
on page 206
• Principal risks and risk management framework on
pages 72-78
Profit before tax and after tax and minority interests
Our treasury management and funding, including information
relating to financial instruments that fulfils the reporting
requirements of Schedule 7 of the Large and Medium-sized
Companies and Group (Accounts and Reports) Regulations
2008
Engagement with suppliers, customers and others
Other relevant information (required by Listing Rule 9.8.4 R) is
incorporated by reference to the directors’ report and appears in
the Annual Report as follows:
Information
Details of our long-term share plans
Details of where a shareholder has agreed to waive
future dividends
Pages
128
The trustee of our EBT has agreed to waive, on an
ongoing basis, any dividends payable on shares it holds
in trust for use under our Employee Share Plans, details
of which can be found in the directors’ remuneration
report.
Relationship agreement
119
120
This section contains the remaining matters not covered
elsewhere on which the directors are required to report
each year.
Profit and dividends
Statutory profit for the Group after tax for 2020/21 was $415m
(2019/20: $408m), and for the company the loss after tax for 2020/21
was $6m (2019/20: Profit of $383m). Details of our dividend
distribution during the year are set out on page 191 – note 28.1 to the
consolidated financial statements.
Subject to the approval of our shareholders, the directors have
recommended a final dividend for the financial year ended 31 March
2021 of 2.5 cents per ordinary share, which will be paid out of
distributable reserves. You can find more about the dividend, including
key dates, at www.airtel.africa. On 28 October 2020, the Board
declared an interim dividend of 1.5 cents per ordinary share. This was
paid on 11 December 2020 to shareholders who were on the UK and
Nigerian share registers on 13 November 2020.
Directors
The names of our current directors, along with their biographical
details, are set out on pages 82-84 and are incorporated into this
report by reference. In addition, Arthur Lang served as a director
during the year.
Details of directors’ interests in our share capital are in our
remuneration report on page 137.
Our Articles of Association govern the appointment, removal and
replacement of our directors and explain the powers given to them.
Avoiding conflicts of interest
The Board regularly reviews each director’s interests outside Airtel
Africa and considers how the chair ensures he is applying objective
judgement in his role, as required by the UK Corporate Governance
Code. To help directors avoid conflicts (or possible conflicts) of
interest, the Board must first give clearance to any potential conflicts,
including directorships or other interests in outside companies and
organisations. This is recorded in a statutory register kept for this
purpose.
If a director considers they are, or might be, interested in any contract
or arrangement in which the company is or may be involved, they must
give notice to the Board in line with the Companies Act 2006 and our
Articles of Association. In this instance, unless allowed by the articles,
the director cannot take part in any discussions or decisions about the
contract or arrangement.
Articles of Association
The Articles of Association can be amended in line with the provisions
of the Companies Act 2006 through a special shareholder resolution.
We adopted two new sets of Articles of Association during the prior
year in preparation for our listing. The information below sets out the
provisions in the Articles of Association in place at the date of this
report.
© 2021 Friend Studio Ltd
File name: DirectorsXreport_v37
Modification Date: 25 May 2021 6:25 pm
Airtel Africa plc Annual Report and Accounts 2021
119
Governance report Directors’ report continued
Share capital and control
We have two classes of shares:
1. Ordinary shares of $0.50 – each carrying the right to one vote
at our general meetings and other rights and obligations as set
out below.
2. Deferred shares – these carry no voting rights.
Details of our share capital movement during the year are set out in the
consolidated statement of changes in equity on page 152.
Rights of members
There are no restrictions on the size of a holding, the exercise of voting
rights, or the transfer of shares. The directors are not aware of any
agreements between shareholders that might restrict the transfer
of shares or voting rights.
Share plans and rights under the
employee share scheme
We operate an Employee Benefit Trust (EBT) for some employee share
plans. The trustees of the EBT have all rights attached to Airtel Africa
shares unless specifically restricted in the plan’s governing document.
Under these plans the Group can satisfy entitlements by acquiring
existing shares or by issuing new shares. Existing shares are held in
the EBT. The trustee of the EBT buys shares in the open market as
required to enable the Group to meet liabilities for the issue of shares
to satisfy awards that vest. The trustee does not register votes in
respect of these shares at our AGMs and has waived the right to
receive any dividends. At 31 March 2021, the EBT held 3,699,614
ordinary shares in the Company. During the year, the EBT transferred
757,186 shares to satisfy the vesting of awards under the company’s
share-based incentive plans.
Purchase of own shares
The articles do not restrict Airtel Africa purchasing its own shares.
No one person has any rights of control over our share capital and
all issued shares are fully paid.
Major shareholders
Major shareholders have the same voting rights as other shareholders. We publish information given to us by substantial shareholders
through the regulatory information service and on our website www.airtel.africa, in line with the FCA’s Disclosure Guidance and Transparency
Rules. At 31 March 2021 we had been notified, in keeping with Rule 5, of the following holdings of ordinary share voting rights2:
Shareholder
Airtel Africa Mauritius Limited
Indian Continent Investment Limited
Singapore Telecom International Pte Ltd
Warburg Pincus LLC
Hero Inc Limited
Qatar Holding LLC
Bharti Global Limited
1 % interest in voting rights attaching to issued shares
Number of
voting rights
2,105,108,805
292,424,330
208,093,705
187,907,574
139,651,408
134,726,964
127,147,531
% of capital1
56.01
7.78
5.54
5.00
3.72
3.58
3.38
2 The company has not received any notifications in accordance with DTR5 from 1 April 2021 to the date of this Annual Report
Significant agreements
(change of control)
Airtel Africa’s borrowing and bank facilities contain the usual provisions
which could potentially lead to prepayment and cancellation by the
other party if there’s a change of company control. There are no other
significant contracts or agreements that would take effect, change or
come to an end on a change of control following a takeover bid. All our
share plans contain provisions for a change of control as summarised
in the directors’ remuneration report on page 128.
We do not have agreements with any director or employee that
would compensate for loss of office or employment resulting from
a takeover bid.
Details relevant to the relationship agreement follow.
Debt facilities and cross-guaranteed debt
Airtel Africa has certain debt notes issued by Bharti Airtel International
(Netherlands) B.V., a wholly owned subsidiary of the Airtel Africa Group
and guaranteed by our majority shareholder AAML. These debt notes
contain covenants which could trigger an early repayment if there’s a
default by our majority shareholder. The outstanding 2023 debt note
of $505m contains a covenant that could restrict certain major
subsidiaries from incurring indebtedness unless the majority
shareholder meets a designated consolidated indebtedness to
120 Airtel Africa plc Annual Report and Accounts 2021
underlying EBITDA ratio. This covenant is in force only under certain
agreed circumstances which currently do not exist and thus the
covenant is currently under suspension and not applicable. These
cross-guaranteed debt notes and covenants mean that the Group
could be adversely impacted by any material uncertainty affecting our
majority shareholder if we are unable to refinance these debt notes in
good time or on acceptable terms.
Relationship agreement
In accordance with the Listing Rules, Airtel Africa entered into a
relationship agreement with Bharti Airtel, Airtel Africa Mauritius Limited
(AAML), our majority shareholder and an indirect subsidiary of Bharti
Airtel, and Bharti Telecom on 17 June 2019. This agreement regulates
the ongoing relationship and ensures that transactions and
arrangements between parties are conducted at arm’s length and on
normal commercial terms, and contains the independence
undertakings and provisions required by the Listing Rules (the Listing
Rule Independence Undertakings). During the financial year, Airtel
Africa has complied with the terms of the Listing Rule Independence
Undertakings contained in the relationship agreement.
So far as Airtel Africa is aware the majority shareholder and its
associates have complied with the Listing Rule Independence
Undertakings contained in the relationship agreement.
© 2021 Friend Studio Ltd
File name: DirectorsXreport_v37
Modification Date: 25 May 2021 6:25 pm
Governance report
Board and meeting participation
As long as Bharti Airtel and/or AAML are a controlling shareholder,
Board meetings and certain committee meetings must include a
non-executive director nominated by Bharti and/or AAML (subject to
certain exemptions) to be valid (quorate). Each Board and committee
meeting must include three directors including two independent
directors to be valid.
As long as Bharti Airtel and/or AAML and their associates hold (directly
or indirectly) ordinary shares in Airtel Africa, they are entitled to appoint
non-executive directors to the Board as follows:
• One non-executive director for 10% or more interest in the
ordinary shares
• Two non-executive directors for 15% or more interest in the
ordinary shares
For every 10% or more interest (directly or indirectly) in the ordinary
shares above 15% in aggregate, Bharti Airtel and/or AAML can
nominate one additional non-executive director to the Board, up to
a maximum of four directors. Independent non-executive directors
must form the majority of the Board.
Similarly, as long as Bharti Airtel and/or AAML and Bharti Telecom and
their associates have a 10% or more interest in Airtel Africa ordinary
shares, each can appoint one observer (who must be a director) to
attend meetings of the Audit and Risk Committee and Remuneration
Committee. This observer can attend and speak at meetings but does
not count towards quorum or have a right to vote. As such, Akhil Gupta
attends the Audit and Risk Committee meetings and Shravin Bharti
Mittal attends the Remuneration Committee meetings.
Other provisions
The agreement provides that Airtel Africa will not make any market
purchases that would cause Bharti or Bharti Telecom to have to
make a mandatory offer under Rule 9 of the Takeover Code, unless
Airtel Africa has the necessary consents and waivers to prevent
a mandatory offer obligation.
Amendments can only be made to this relationship agreement in
writing and with the recommendation of a majority of the independent
directors. The relationship agreement will come to an end upon the
earlier of:
• Ordinary shares of Airtel Africa no longer being listed on the
premium listing segment and traded on the London Stock
Exchange (LSE)
• Bharti Airtel, AAML and Bharti Telecom Limited, together with
their associates, ceasing to be interested (directly or indirectly
in aggregate) in at least 10% of issued ordinary shares
The relationship agreement will terminate upon the shares ceasing
to be listed on the LSE’s main market or the principal shareholders
and their associates ceasing to be interested in at least 10% of the
issued shares.
We believe that the terms of this relationship agreement enable
Airtel Africa to carry out its business independently of Bharti Airtel,
AAML and Bharti Telecom.
Services agreement
Bharti Airtel Limited provides services to Airtel Africa and its
subsidiaries including Bharti Airtel International (Netherlands) B.V.
(BAIN) under a services agreement.
Provision of information
To provide services to Airtel Africa under the services agreement,
Bharti Airtel Limited will have access to information related to the Airtel
Africa Group which may include sensitive or confidential information.
Bharti Airtel will ensure its affiliates comply with the terms of the
information flow protocol to the extent that it is legally able to do so.
Airtel Africa will provide Bharti Airtel with service-related information
necessary for it to provide services under the agreement.
Future developments
The strategic report contains details of likely future developments
within Airtel Africa.
Group policy compliance
Each Group policy is owned by a member of the Executive Committee
to ensure clear accountability and the authority to make sure the
associated business risk is adequately managed. The senior leadership
team member responsible for each Group function has primary
accountability for ensuring compliance with all Group policies by all our
markets and entities. Our Group compliance team supports the policy
owners and local markets in implementing policies and monitoring
compliance. All of the key Group policies have been consolidated into
our Code of Conduct which applies to all employees and those who
work for or on behalf of Airtel Africa. It sets out the standards of
behaviour expected in relation to areas such as insider dealing,
bribery and raising concerns through our whistleblowing process.
Directors’ indemnities
We have agreed to indemnify directors for certain losses and liabilities
in connection with their duties, powers and office. Qualifying third-
party indemnity provisions (as defined by section 234 of the
Companies Act 2006) were in force during the course of the financial
year ended 31 March 2021. We also hold directors’ and offers’ liability
insurance covering our directors for any legal action against them.
We took legal advice on this subject.
Branch and representative offices
Bharti Airtel International (Netherlands) B.V. has a branch office in
Nairobi, Kenya. It was issued a certificate of compliance on 7 October
2010 with number CF/2010/33117.
Anti-bribery and anti-corruption
In line with the Bribery Act 2010, we have written policies on avoiding
and not tolerating bribery or corruption. These apply across all our
businesses and can be found on our website. All employees are
trained in anti-bribery and anti-corruption to help mitigate the risk
of reputational damage, financial penalties and possible exclusion
from certain approved partnerships.
© 2021 Friend Studio Ltd
File name: DirectorsXreport_v37
Modification Date: 25 May 2021 6:25 pm
Airtel Africa plc Annual Report and Accounts 2021
121
Governance report Audit and Risk Committee
recommendations and statements
of compliance
The committee has completed its review of the effectiveness of
internal controls, including risk management, during the year and up to
the date of this Annual Report. The review covered all material controls
including financial, operating and compliance. As such, we can provide
assurance to the Board under the 2018 UK Corporate Governance
Code. This is covered in more detail in the Audit and Risk Committee
report – see pages 100-109.
Airtel Africa has complied throughout the reporting period with the
provisions of the Statutory Audit Services for Large Companies Market
Investigation (Mandatory Use of Competitive Tender Processes and
Audit Committee responsibilities) order 2014.
Annual general meeting (AGM)
Our AGM will be live-streamed on Thursday 15 July 2021 at 11:00 hrs
BST from 53/54 Grosvenor Street, London W1K 3HU. Details of the
business to be transacted at the AGM are included in our 2021 Notice
of the AGM available on our website at www.airtel.africa.
In line with recent practice and good governance, we’ll conduct all
voting on resolutions at this year’s AGM by poll. The Board believes
that this way of voting gives as many shareholders as possible the
opportunity to have their votes counted.
This directors’ report has been approved by the Board and is signed on
its behalf by:
Simon O’Hara
Group company secretary
11 May 2021
Directors’ report continued
Political donations
In line with our policy, we have not made any donations to political
parties during the year.
At our next AGM, our directors will be asking for the authority to
make political donations of no more than £25,000 in total. This is to
strengthen our corporate governance by making sure that neither
Airtel Africa nor our subsidiaries inadvertently breach the wide
definitions in Part 14 of the Companies Act.
Employing people with disabilities
It is our policy that people with disabilities should be fairly considered
for any job vacancy.
We are committed, wherever possible, to making sure people with
disabilities are supported and encouraged to apply for employment
and able to work successfully at Airtel Africa.
Important events since the end of the
financial year
Details of those important events affecting the Group which have
occurred since the end of the financial year are set out in the strategic
report and note 37 to the consolidated financial statements on
page 209. Information related to Covid-19 is set out on page 16.
Our auditor
Deloitte LLP have confirmed their willingness to continue as our
auditor. Following our Audit and Risk Committee’s review of their
effectiveness (described on page 108), we will propose at our AGM
that we reappoint Deloitte.
Our policy is that our auditor will not carry out non-audit services,
except where appropriate and in line with our policy for doing such
work. Our Audit and Risk Committee also considers the ethical and
auditing professional standards related to non-audit services by our
external auditor. Deloitte provided limited non-audit services during
the year in line with our policy as described in the Audit and Risk
Committee report – see page 109.
As at the date of this report, so far as each director of the company is
aware, there is no relevant audit information of which our auditor is
unaware. Each director confirms that they’ve taken all the steps that
they ought to have taken as a director in order to make themselves
aware of any relevant audit information and to establish that our
auditor is aware of that information. This confirmation is given and
should be interpreted in line with the provisions of section 418 of the
Companies Act 2006.
122 Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: DirectorsXreport_v37
Modification Date: 25 May 2021 6:25 pm
Governance report Directors’ responsibilities statement
The directors are responsible for preparing the Annual Report
and financial statements in accordance with applicable law and
regulations.
Company law requires the directors to prepare financial statements
for each financial year. Under that law the directors are required
to prepare the Group financial statements in accordance with
international accounting standards that reflect the requirements of the
Companies Act 2006 and International Financial Reporting Standards
(IFRSs) adopted pursuant to Regulation (EC) No 1606/2002 as it
applies to the European Union. The company financial statements
have been prepared in accordance with UK Generally Accepted
Accounting Practice (UK GAAP – accounting standards and applicable
law), including FRS 101 ‘Reduced Disclosure Framework’. Under
company law, the directors must not approve the accounts unless they
are satisfied that they give a true and fair view of the state of affairs of
the Group and company and of the profit or loss of the Group for that
period.
In preparing the company financial statements, the directors are
required to:
Responsibility statement
We confirm that to the best of our knowledge:
• The financial statements, prepared in accordance with the
relevant financial reporting framework, give a true and fair
view of the assets, liabilities, financial position and profit or loss
of the company and the undertakings included in the
consolidation taken as a whole.
• The strategic report includes a fair review of the development
and performance of the business and the position of the
company and the undertakings included in the consolidation
taken as a whole, together with a description of the principal
risks and uncertainties that they face.
• The Annual Report and financial statements, taken as a whole,
is fair, balanced and understandable and provide the
information necessary for shareholders to assess Airtel
Africa’s position and performance, business model and
strategy.
• Select suitable accounting policies and then apply them consistently
• Make judgments and accounting estimates that are reasonable and
This responsibility statement was approved by the Board of
directors on 11 May 2021 and is signed on its behalf by:
Raghu Mandava
Chief executive officer
11 May 2021
prudent
• State whether applicable UK Accounting Standards have been
followed, subject to any material departures disclosed and explained
in the financial statements
• Prepare the financial statements on the going concern basis unless
it is inappropriate to presume that the company will continue in
business.
In preparing the Group financial statements, International Accounting
Standard 1 requires that directors:
• Properly select and apply accounting policies
• Present information, including accounting policies, in a manner that
provides relevant, reliable, comparable and understandable
information
• Provide additional disclosures when compliance with the specific
requirements in IFRSs are insufficient to enable users to understand
the impact of particular transactions, other events and conditions on
the entity’s financial position and financial performance
• Make an assessment of the Group’s ability to continue as a going
concern.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group’s and
company’s transactions and disclose with reasonable accuracy at any
time the financial position of the Group and company and enable them
to ensure that the financial statements comply with the Companies
Act 2006. They are also responsible for safeguarding the assets of the
Group and company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the
corporate and financial information included on the company’s website.
Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in
other jurisdictions.
© 2021 Friend Studio Ltd
File name: DirectorsXstatement_v22
Modification Date: 25 May 2021 6:25 pm
Airtel Africa plc Annual Report and Accounts 2021
123
Governance report Directors’ remuneration report
Doug Baillie
Chair of the Remuneration Committee
This report sets out our remuneration
policy for our executive directors, what
they’ve been paid in the year and how
this is linked to the performance
achieved.
There are three sections to the report:
1. An introduction from our committee
chair – this explains our approach to
remuneration, and summarises the
key decisions made by the committee
during the year (also part of the
annual remuneration report) and
an overview of 2020/21 approach
and policy.
2. The directors’ remuneration
policy (DRP) – this sets out our
remuneration policy for our CEO,
chair and non-executive directors
which was put to a binding
shareholder vote at last year’s AGM.
3. Our annual report on remuneration
– this sets out in detail how we’ve
applied our remuneration policy in
2020/21, the remuneration received
by directors for the year and how we’ll
apply the policy in 2021. This report
will be put to an advisory shareholder
vote at the AGM.
All amounts in this report are in US dollars ($),
unless stated otherwise
Chair’s introduction
I’m pleased to present the Remuneration Committee’s report for
2020/21.
2020 Annual General Meeting
This was our first AGM as a listed company and our committee was
pleased that both our Remuneration Policy and Annual Remuneration
Report were passed with strong support.
Our committee took note of the comments received from key
stakeholders and continued to engage with Airtel Africa’s shareholders
and representative bodies to understand their views on the executive
directors’ remuneration and to further their understanding of how
our policy reflects Airtel Africa’s very specific circumstances. Our
committee has decided to amend the way in which the current policy
is implemented in two specific areas with effect from the 2021 AGM.
On annual bonus, the committee has agreed to move to one-third of
the annual award being deferred into shares and being held for a
two-year period. Our committee has also agreed to introduce a
two-year post-employment holding period for new executive directors
which has been set at 125% of annual base salary, which we judge
appropriate for the markets in which Airtel Africa executives are located.
As these changes are more restrictive than the requirements in the
current binding policy, we will not be asking shareholders to approve
a new policy before implementing them. They will be formally
incorporated into our policy when our shareholders are next asked
to approve the policy, expected to be in 2023.
Remuneration for our executive directors is based on the key principles
of simplicity, pay for performance, and alignment with shareholders
and other stakeholders. At present, our CEO is the only executive
director of Airtel Africa and the only executive formally subject to this
policy. The policy contains elements of balance, given that we’re listed
on the London Stock Exchange (with a secondary listing on the
Nigerian Stock Exchange) and operate in 14 countries in Africa from
headquarters in Nairobi.
Applying our policy in the current climate
The pandemic has highlighted the importance of the service we
provide. Maintaining resilient networks in all the countries we operate
in provided the platform for significant partnerships in assisting
governments with delivery of emergency funds and support packages
and the communication of comprehensive Covid-19 health messages.
It also provided the platform for education partnerships to provide free
data and internet connectivity to those most in need and enabled key
commercial partnerships to support financial inclusion.
As I write this, it is not yet clear what the long-term impact of Covid-19
will be on our employees, the more than 118.2 million subscribers
we serve, and the partners that make up the broader Airtel Africa
ecosystem. All our employees have played their part and will continue
to do so, to ensure Airtel Africa fulfils its role in seeing this crisis
through. Alongside other actions, our employees, including senior
management, have contributed to efforts to assist those worst
affected by the pandemic by voluntarily pledging to donate a
proportion of their salary to charities in their local communities
during the first months of the crisis. In the case of the CEO, this was
20% of his salary for three months.
As highlighted in last year’s report, the salary reviews of all employees
and setting of short-term and LTIP targets for the executive director
were delayed because of the exceptional global circumstances around
Covid-19. These were finalised and communicated to shareholders
at the end of the second quarter of the financial year.
Having assessed the continued strong performance of Airtel Africa and
the impact of the pandemic on our stakeholders, we decided to increase
employee salaries, including the CEO’s, with effect from 1 June 2020.
The decision is consistent with the approach taken by the majority of other
large African organisations. In determining the level of the CEO’s revised
salary, our committee considered factors including the performance of the
CEO, the level of increases across the Group, and the fact that the CEO’s
124 Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: DirectorsXRemuneration_v48
Modification Date: 26 May 2021 12:20 pm
Governance report salary was not repositioned when we listed in London. The average
increase across the Group was 5% of salary. The average increase in
Kenya where our CEO is based was 6%, with a range of increases
around this average taking account of individual performance and market
position. In light of the above, our committee confirmed an increase of
approximately 3% above the average for the workforce in Kenya for the
CEO. While this is above the average for employees in Kenya, it is consistent
with increases awarded to top performers across Airtel Africa and
recognises our CEO’s continued strong performance in leading our
ongoing success. The company’s major shareholders were consulted
about the level of this increase early in 2020 and were broadly supportive.
Annual bonuses for 2020 were based on a scorecard of measures
comprising net revenue (35%), EBITDA (35%), operating free cash flow
(10%) and personal objectives (20%). Given the strong in-year
performance of the Group with 20.3% growth in net revenue, 25.2%
growth in EBITDA and 48.8% growth in operating free cash flow, the
stretch targets for the financial objectives were exceeded with the
CEO’s personal objectives also being achieved in full. As a result, a
bonus at maximum level has been awarded, of which a significant
percentage will be deferred into shares for two years. This needs to
be seen in the light of the business continuing to operate normally
with full employment, no government support funding and a proposed
dividend in line with policy for our shareholders.
LTIPs granted in 2020 are subject to net revenue, underlying EBITDA
margin and relative TSR targets. For these awards, all metrics are
measured over a three-year period ending in 2023. The targets were not
disclosed at the time the awards were granted and we have since
considered whether they can now be disclosed. We operate only in Africa
with three key competitors, none of which currently disclose their LTIP
targets. The Board does not believe, for reasons of commercial sensitivity,
it would be in the interests of our shareholders to disclose the net
revenue and underlying EBITDA LTIP targets while our principal
competition do not disclose their targets. The targets will be disclosed
when they are no longer considered commercially sensitive – this will be
no later than the report for the year in which the awards vest. The targets
have been based on the current three-year plan at the time of the grant in
2020/21, with the maximum target for net revenue set at a significant
stretch to our expectations of target performance over three years. The
underlying three-year EBITDA target is, from an already high, competitive
base, equally stretching and both targets will be fully disclosed on vesting.
On both these financial metrics, the company’s performance is trending
ahead of target at the end of year one. On TSR against the MSCI
Emerging Markets Communications Service Index, threshold will vest
at the 50th percentile and maximum will vest at the 75th percentile.
In our second year, the committee spent considerable time on staying
up to date with developments in remuneration in the UK and training
sessions on key parts of the Corporate Governance code. Our
committee also began to engage on the emerging Airtel Africa
sustainability statement and how it can be incorporated into our
remuneration policy.
There is no doubt the past year was extraordinary in every aspect and
one in which all our colleagues demonstrated strong resilience in living
our purpose of delivering vital services and helping to safeguard and
transform the lives of our stakeholders. Not only have we delivered
outstanding overall results, but gone the extra mile to ensure those
most affected were not forgotten.
I would like to thank my fellow committee members for their diligence
and dedication. We look forward to seeing your support for our
remuneration report at this year’s AGM and, more importantly, seeing
the continued benefits of our work to all our stakeholders over the
coming years.
I will be attending the 2021 AGM and look forward to engaging with
shareholders at the meeting. In the interim if you wish to discuss any
aspects of this report please contact me via our company secretary,
Simon O’Hara (see page 219 for contact details).
Doug Baillie
Chair, Remuneration Committee
11 May 2021
Remuneration Committee
• Advises the Board on remuneration for Board members,
executive directors, the company secretary, the Executive
Committee and other senior employees
• Makes sure that remuneration arrangements identify and
mitigate reputational and other risks from excessive rewards and
inappropriate behaviour linked to target-based incentive plans
• Ensures that targets are appropriate, geared to delivering our
strategy and enhancing shareholder value
• Makes sure that rewards for achieving or exceeding agreed
targets are not excessive
• Promotes the increasing alignment of executive, employee
and shareholder interests through appropriate share plan
participation and executive shareholding guidelines
• Reviews employee remuneration and policies and the alignment
of incentives with culture, particularly when setting the executive
directors’ remuneration policy
• Through the committee chair, engages with shareholders on
remuneration-related matters
Main activities in 2020/21
During the financial year, the committee:
• Engaged with shareholders on the CEO’s proposed salary
increase, the outcomes of our 2020 AGM and the finalisation
of annual bonus and LTIP metrics and targets
• Agreed annual salary increases and reviewed senior executive
remuneration
• Implemented and made awards under our share plans
• Determined the level of bonus payments for this financial year
• Drafted and agreed our directors’ remuneration report
• Received training in key areas of the corporate governance code
and Investor Association’s guidance
• Held regular updates on latest investor thinking and emerging
and future remuneration trends. This included exposure to the
ESG trends and their expected impact on remuneration of
executive directors and senior management
Shareholder consultation
Our committee consulted with our major shareholders and leading
representative bodies on the key features of the directors’
remuneration policy and the proposed realignment of the CEO’s
salary in the period leading up to our first AGM in June 2020.
Following the AGM, our committee wrote again to shareholders and
representatives to provide further information about our policy and
the way it is operated. We also confirmed that the CEO’s salary
increase, which had been delayed along with those of other
employees while we assessed the impact of the pandemic on our
business and stakeholders, would be implemented as planned.
The majority of shareholders consulted who expressed a view in
response to these letters indicated they were broadly supportive.
Engaging with employees
The report on page 34 sets out some of the activities undertaken
during the year and explains our work on diversity and employee
engagement. The committee does not directly consult employees
on executive remuneration but during the year a number of town
halls were held, covering a wide range of topics with our CEO
including questions about employee remuneration. Next year,
a non-executive director will be invited to join these meetings.
Airtel Africa plc Annual Report and Accounts 2021
125
© 2021 Friend Studio Ltd
File name: DirectorsXRemuneration_v48
Modification Date: 26 May 2021 12:20 pm
Governance report Directors’ remuneration report continued
Performance and remuneration for 2020/21
Part 1
Business performance context
To recap on the performance as described in the strategic report
(see pages 1-80), this year Airtel Africa delivered a strong performance,
with double-digit revenue and underlying EBITDA growth.
• Annual bonuses depend primarily on financial measures, with 20%
of the CEO’s bonus linked to non-financial measures covering talent
development and compliance in 2020/21. Any bonus paid of more
than 100% of annual base salary will be deferred into Airtel Africa
plc shares for two years.
Applying our policy in 2021/22
Salary
Base salary increases normally take effect from June each year. Salary
increases for the rest of the workforce will be decided in June 2021,
however, in light of the anouncement of the CEO’s decision to retire
with effect from 30 September 2021, his salary will remain unchanged
in 2021/22. The current salary for Raghunath Mandava for 2021/22
is therefore $900,000.
• Raghunath Mandava, our CEO, received a bonus of 100% of
maximum. This recognises Airtel Africa’s overall financial
performance as well as his individual performance against personal
objectives set at the start of the year.
Benefits
No pension is payable to the CEO. Taxation equalisation benefits and
other benefits, including car and expatriate living allowances, will be
provided on the same basis as to other employees.
• The committee reviewed the formulaic outcomes against the bonus
and LTIP targets and decided that these were a fair refection of the
overall performance achieved for shareholders.
• LTIPs granted in 2020 are subject to net revenue, underlying EBITDA
margin and relative TSR. For these awards, all metrics are measured
over a three-year period ending in 2023. The targets applying to
these awards are commercially sensitive but will be disclosed no
later than the year in which the awards vest.
• Awards granted in 2019 are subject to relative TSR measured over
a three-year period ending in 2022 and net revenue and underlying
EBITDA measured over three consecutive annual periods. As a
result of Airtel Africa’s strong net revenue and underlying EBITDA
growth in 2020/21, the conditions related to performance against
these metrics during the year were achieved in full. Details are
provided later in this report.
• The committee confirms that in assessing performance against the
targets above no discretion was applied to the outcome and that the
Policy has operated as intended.
• The Replacement Awards, which were granted shortly after our
listing and disclosed last year, are based on the same scorecard
as the 2019 awards. Details of the awards which have vested are
provided later in this report.
Variable pay
Maximum bonus opportunity is capped at 200% of base salary. The
2021/22 target bonus will be set at 75% of base salary. In a change
to the operation of our Policy for new appointments to the Board,
one third of any bonus will be deferred into shares for two years. It is
intended that metrics and weightings remain unchanged from last
year, with 80% based on financial metrics (Net revenue, underlying
EBITDA and Operating free cash flow) and 20% Non-financial.
For 2021/22, LTIP grants will consist of performance shares with a
face value of up to 90% of salary and restricted stock units (RSUs)
with a face value of up to 40% of salary. The mix of performance
shares and RSUs reflects practices in the markets in which our
executive directors are located, as well as the challenges involved
in setting robust performance targets given the locations of our
operations. In light of his decision to retire, the current CEO will not
be granted an LTIP award in 2021/22.
We strongly support the principle that a significant proportion of
pay should be tied to performance. We will continue to set robust
and challenging performance targets for both the bonus and the
performance shares component of the LTIP, with vesting of restricted
stock units (RSUs) dependent on the satisfaction of a financial
underpin. It is intended that three performance conditions, as in
2020/21, will apply to the performance shares – relative TSR (20%),
underlying EBITDA (40%) and revenue (40%), with each being
measured over three years. The underlying EBITDA and revenue
targets will not be disclosed at grant as they are currently considered
to be commercially sensitive. They will be disclosed when they are no
longer considered commercially sensitive – this will be no later than the
report for the year in which the awards vest. The underpin applying to
the grant of RSUs will require a positive operating free cash flow over
the three financial years ending the year before the RSUs vest. In
addition, in future, executives who leave Airtel Africa will be required
to retain shares equal in value to the lower of their holding on the date
of cessation or 125% of shares. Only shares acquired from LTIP and
deferred bonus awards vesting from the date of the 2020/21 AGM
will count toward this requirement.
Non-executive directors’ fees
Non-executive directors’ fees will remain unchanged in 2021/22.
New CEO and CFO
Details of the ongoing remuneration arrangements for our new CEO
and the CFO on his appointment to the Board have not been formally
approved by the Committee at the time this report has been finalised
and will be disclosed in our 2021/22 directors’ remuneration report.
126 Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: DirectorsXRemuneration_v48
Modification Date: 26 May 2021 12:20 pm
Governance report Part 2
Directors’ remuneration policy
This policy applies to our directors and was approved by shareholders
in a binding vote at the 2020 AGM held on Wednesday 24 June 2020.
There are minor updates to the text to reflect the fact that the policy
has been approved by shareholders and implemented in the year.
The policy as approved at the 2020 AGM can be found on our website:
www.airtel.africa.
We developed the policy taking into account the principles of the UK
Corporate Governance Code and the views of our major shareholders.
Our policy is intended to attract, motivate and retain high-calibre
directors, to promote the long-term success of Airtel Africa, and to
be in line with good practice and the interests of our shareholders.
Key principles of our remuneration policy
• Proportionality: remuneration should be set at competitive levels
to ensure our ability to attract and retain premium talent.
• Clarity, simplicity and alignment to culture: the structure of these
packages and, in particular, the design of performance-based
remuneration schemes, should be aligned with stakeholders’
interests, be easy to explain, and support our business strategy
objectives.
• Predictability and risk: a significant proportion of the remuneration
of executive directors should be performance based. This should
be appropriately balanced between the achievement of short-term
and longer-term objectives and not reward poor performance or
encourage inappropriate risk-taking.
• Reflecting the diversity of our business: the structure of the
package, and benefits in particular, should reflect local practices
and employment conditions in the countries in which executive
directors are based.
Executive directors’ remuneration policy table
Base salary
Purpose and link
to strategy
To recruit and reward
executive directors of
a suitable calibre for
the role and duties
required
Benefits
To provides market
competitive benefits
How we assess performance
Reviewed annually by the committee, taking account of Group and
individual performance, changes in responsibility and levels of
increase for the broader employee population.
Maximum opportunity
There is no prescribed
maximum salary or
annual increase.
Reference is also made to market levels in companies of similar
size and complexity.
The committee considers the impact of any base salary increase
on the total remuneration package.
Salaries (and other elements of the remuneration package)
may be paid in different currencies as appropriate to reflect
the geographic location.
Benefits for existing directors include a number of cash benefits,
reflecting an expatriate package in a Kenyan environment. Future
executive director appointments may be provided with an equivalent
package reflecting their country residence.
Expatriate benefits include housing allowance, education allowance
and home leave tickets. Car allowances, life and medical insurance
are also provided.
Existing directors do not receive pension benefits.
We may also equalise for double taxation between the UK and Kenya
if required.
However, increases will
generally be guided by
increases for the broader
employee population.
Increases above this level
may be made in specific
situations to recognise
development in the role,
changes in responsibility,
material changes to the
business or exceptional
company performance.
Maximum values are
determined by reference
to market practice,
avoiding paying more
than is necessary.
© 2021 Friend Studio Ltd
File name: DirectorsXRemuneration_v48
Modification Date: 26 May 2021 12:20 pm
Airtel Africa plc Annual Report and Accounts 2021
127
Governance report Directors’ remuneration report continued
Part 2
Bonus plan
Purpose and link
to strategy
To give an incentive
and reward for
annual performance
achievements.
To also provide
sustained alignment
with shareholders
through a component
deferred in shares
How we assess performance
Awards are based on annual performance against a scorecard
of metrics aligned with our strategy, KPIs and other yearly goals.
Financial measures have the highest weighting. Performance
against strategic financial and non-financial objectives may also
be measured, but will not normally account for more than 20%
of the total.
The policy gives the committee the authority to select suitable
performance metrics aligned to our strategy and shareholders’
interests, and to assess the performance outcome.
Long-term
incentive plan
(LTIP)
To provide an
incentive and
reward for the
delivery of the
company’s strategic
objectives and
provide further
alignment with
shareholders
through the use
of shares
Any award in excess of the annual base salary is normally delivered
in deferred shares for a further two years. Any dividend equivalents
accruing on shares between the date when the awards were
granted and when the awards vest will normally be delivered
in shares.
Malus and clawback provisions apply to both the cash and share-
based element of awards for a period of two years from the date
of payment (cash) or date of release (shares) if there is:
• Misstatement of company’s accounts
• An error in calculation performance
• Gross misconduct resulting in dismissal
• Material failure in risk management
• Reputational damage
Awards may comprise performance shares (PSP) or restricted
stock units (RSUs). Individuals are considered each year for an
award of shares that normally vest after three years to the extent
that performance conditions are met and in line with the terms
of the plan approved by shareholders.
PSP awards are made subject to continued employment and
the satisfaction of stretching performance conditions normally
measured over three years set by the committee before each grant.
For PSP awards to be made in 2021 it is intended that the metrics
will comprise relative TSR against the MSCI Emerging Markets
Communication Services Index (20%), net revenue (40%) and
underlying EBITDA (40%). The committee has the discretion to
change the metrics and weighting from year to year. Major
shareholders will normally be consulted before any significant
changes.
Awards of RSUs depend on continued employment and financial
underpin set by the committee before each grant. Awards granted
in 2021 will require positive operating free cash flow over three
financial years.
The LTIP vesting outcome can be reduced, if necessary, to reflect the
underlying or general performance of Airtel Africa. A two-year
post-vesting holding period also normally applies to LTIP awards that
vest (net of tax) after the adoption of this policy. Any dividend
equivalents will normally be delivered at the end of the vesting period
in shares based on the proportion of the award that vests.
Malus and clawback provisions apply to awards made for three years
from the date on which the award vest when there has been:
• A misstatement of the company’s accounts
• An error in calculating performance
• Gross misconduct resulting in dismissal
• Material failure in risk management
Maximum opportunity
The policy maximum
annual bonus is 200%
of base salary.
The committee will use
its discretion within the
maximum policy limits
to consider the target
bonus opportunity
taking account of
market development
opportunities, specific
events and role expansion.
For 2021/22, the CEO’s
target bonus opportunity
will be set at 75% of his
base salary, with a
maximum of 150% of
salary.
Dividend or dividend
equivalents may be
earned on the deferred
bonus component.
The maximum annual
grant limit is 200% of
base salary (face value of
shares at grant), of which
normally not more than
50% of annual salary may
be granted as RSUs to any
individual in a single year.
PSP awards with a face
value of 100% of salary
and RSUs with a face
value of 50% of salary will
normally be awarded.
25% of the PSP award is
available for threshold
performance, rising to
100% of the grant for
performance at the
‘stretch’ level.
Share ownership
policy
To further align the
interests of executive
directors with those
of shareholders
• Reputational damage
Executive directors are required to build up and retain shares worth
250% of base salary within five years of being appointed to the Board.
Post-vesting holding periods and bonus deferral continue to apply
post-employment to create continued alignment with shareholders
after employment at Airtel Africa has come to an end.
Not applicable
128 Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: DirectorsXRemuneration_v48
Modification Date: 26 May 2021 12:20 pm
Governance report Discretion in operating the incentive plans
To make sure these plans are operated and administered efficiently,
the committee has discretion in relation to a number of areas.
Consistent with the marketplace, these include (but are not limited to):
The committee has the right to change or substitute any performance
conditions if something occurs that would mean the condition would
not achieve its original purpose. Any amended condition would not
be materially less difficult to satisfy in the circumstances.
• Selecting the participants
• The timing of grant and/or payment
• The size of grants and/or payments (within the limits set out in the
policy table)
• The extent of vesting based on the assessment of performance
• Determining a ‘good leaver’ and, where relevant, the extent of
vesting for share-based plans
• Treatment in exceptional circumstances such as a change of control,
when the committee would act in the best interests of our business
and its shareholders
• Making the adjustments required in certain circumstances (such as
right issues, corporate restructuring, variation of capital and special
dividends)
• The form of settlement of awards in line with the discretions set out
in the plan rules
• The annual review of performance measures, weightings and
targets for the discretionary incentive plans from year to year
Choice of performance measures and approach to target
setting
Targets for each year’s annual incentive and long-term incentive
award are determined by the committee, taking a range of factors into
account. These include the annual budget, the relevant three-year
strategic plan, analysts’ consensus factors, wider economic facts
and affordability for the business.
Bonus plan
The annual bonus is based on performance against a stretching
combination of financial and non-financial performance measures
aligned with our KPIs and operational goals for the year. As such, they
typically include measures of revenue, profitability and cash flow, which
reflect our focus on profitable growth, cash generation and satisfying
our debt and other capital commitments. Executive directors and
members of our senior management team are also assessed on
personal objectives, as agreed by our committee at the start of each
year. We review and adapt the objectives as appropriate to reflect
the priorities for the business in the year ahead.
2020 and 2021 metrics and rationale
Metric
Net revenue
Weighting
Why chosen
Key indicator of our growth, market penetration and
customer retention
Underlying
EBITDA
80%
Measure of our profitability and cash-generating ability
from year to year
Operating free
cash flow (OFCF)
Non-financial
20%
Measure of the underlying profitability from our operations, as
well as our ability to service debt and other capital
commitments
Indicator of the performance of the organisation in key
non-financial areas. For 2020, the non-financial measures
relate to people and regulatory objectives
How targets are set
Set each year by the committee taking
account of prevailing market conditions
and progress towards strategic goals.
Set each year by the committee taking
account of prevailing market conditions
and progress towards strategic goals.
Set each year by the committee taking
account of prevailing market conditions
and progress towards strategic goals.
Set each year by the committee based on
the priorities and responsibilities of each role.
We set a sliding scale of targets for each financial measure to encourage continuous improvement and to stretch performance. The policy gives
the committee the authority to select suitable performance metrics aligned to our strategy and shareholder interest.
© 2021 Friend Studio Ltd
File name: DirectorsXRemuneration_v48
Modification Date: 26 May 2021 12:20 pm
Airtel Africa plc Annual Report and Accounts 2021
129
Governance report Directors’ remuneration report continued
Part 2
Long-term incentive plan (LTIP)
The performance conditions for the LTIP in 2020/21 and 2021/22 are
based on financial growth and total shareholder return (TSR). We set a
sliding scale of challenging performance targets for each measure. Our
committee reviews the choice of performance measures and the
appropriateness of the performance targets and TSR peer group
before each PSP grant. While different performance measures and/or
weightings may be applied for future awards, the committee will
consult with major shareholders before making any significant
changes.
2020 and 2021 metrics and rationale
Metric
TSR, relative to a
peer group of
competitors
Weighting
20%
Why chosen
Measures the total returns to our shareholders, providing
close alignment with shareholders interest
Net revenue
40%
A key indicator of long-term growth achieved in the market
Underlying
EBITDA
40%
A key indicator of long-term growth on profitability from
operations
How targets are set
The committee sets the performance
requirements for each grant. For grants
in 2021, we intend to use a peer group
of international emerging market
communication services organisations
(MSCI emerging Markets Communication
Services Index constituents).
The committee sets threshold and stretch
levels aligned to our strategic target.
The committee sets threshold and stretch
levels aligned to our strategic target.
Legacy arrangements
Airtel Africa has the authority to honour any commitments entered
into with current or former directors before this policy is approved
or before their appointment to the Board. We share details of any
payments to former directors in our remuneration report for the
relevant year.
Executive directors’ existing service contracts
Our executive directors have entered into agreements with an
indefinite term that may be terminated by either party on three
months’ written notice. At the committee’s discretion, we may make
a payment in lieu of notice – this is calculated relative to base salary
and benefits only, paid on a phased basis and subject to mitigation.
Entitlement to both annual bonus and LTIP awards will typically lapse
on cessation, although in good leaver circumstances we may pay
pro-rata bonus for the period worked. LTIP awards may vest at the
normal vesting date subject to the performance conditions and are
normally pro-rated for time.
If a director commits an act of gross misconduct or similar, he or she
may be dismissed without notice and without further payment or
compensation, except for sums accrued up to the leaving date.
Name of director
Raghunath Mandava
Date of service contract
13 June 2019
Unexpired term
Rolling contract
The committee may agree that we will meet certain relocation, legal,
tax equalisation and other incidental expenses as appropriate.
For an internal appointment, any legacy pay elements related to
the previous role are allowed to pay out according to their terms.
Service contracts for new executive directors and policy
on loss of office
Contracts for new executive directors will normally include up to six
months’ notice by either party. If the contract is brought to an end by
the company other than for ‘cause’ as specified in the contract, the
executive director would be eligible for payment of the base salary
and benefits relating to the unexpired portion of the notice period.
We may choose to continue providing some benefits instead of
paying a cash sum representing their cost.
We would try to mitigate the termination payment by, for example,
making payments in instalments that can be reduced or ended if the
former director wants to begin alternative employment during the
payment period. We will pay any statutory entitlements or sums
to settle or compromise claims in connection with a termination
(including, at the discretion of the committee, reimbursement for
legal advice and provision of outplacement services) as necessary.
Good leavers may receive an annual bonus related to the period
served. This would be payable after the relevant year end, subject
to the normal conditions for the bonus and normally paid in cash.
Approach to remuneration for new executive directors
The remuneration package for a newly appointed executive director
will be set in line with the remuneration policy at the time. Variable
remuneration will be determined in the same way as for existing
executive directors and is subject to the maximum limits on variable
pay referred to in the policy table on page 128.
The committee may also buy out any remuneration and contract
features that an executive director may be giving up in order to join
Airtel. Such buyouts would take into account the nature of awards
forfeited and would reflect (as far as possible) performance conditions,
the value foregone and the time over which they would have vested or
been paid. Where shares are used, these awards may be made under
the terms of the LTIP or under a separate arrangement, as permitted
under the UK Listing Rules.
Share-based awards held by good leavers will typically vest according
to the normal schedule. These are subject to performance conditions
and usually pro-rated.
On a change of control of Airtel Africa, outstanding awards will
normally vest early to the extent that the performance conditions have
been satisfied. Awards would normally be reduced pro-rata to reflect
the time between the grant date and the date of the corporate event.
If there is a demerger, special dividend or other event the committee
thinks may affect the current or future value of shares, they may
decide that awards will vest on the same basis as on a change of
control. If there is an internal corporate reorganisation, awards will
be replaced by equivalent new awards over shares in a new holding
company, unless the committee decides that awards should vest
on the same basis on a change of control.
130 Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: DirectorsXRemuneration_v48
Modification Date: 26 May 2021 12:20 pm
Governance report Remuneration scenarios at different performance levels
These charts illustrate the total potential remuneration for the CEO
at three performance levels.
Remuneration scenarios ($000)
Chief Executive Officer
Fixed pay
Annual bonus
Long-term incentives
$2,549
32%
26%
42%
$1,069
100%
$3,589
32%
$4,174
42%
38%
32%
30%
26%
Minimum
Target
Maximum
Maximum +
50% share
price growth
1 Assumptions:
Minimum = fixed pay only (salary + benefits + pension)
On-target = 50% vesting of maximum bonus and 55% for PSP awards
and 100% for RSUs
Maximum = 100% vesting of maximum bonus and LTIP awards
Salary levels (on which other elements of the package are calculated)
are based on those applying on 1 April 2021
2 Benefit values for the CEO exclude the costs of business travel and
accommodation
3 To reflect the impact of a share price increase between award and vesting, the
LTIP value in the maximum column has been increased by 50% in the share price
growth column
4 This is based on the normal package for the current CEO as the only current
Executive Director, and is shown for illustrative purposes only. Note that due to his
decision to retire the CEO will not receive an LTIP award in 2021/22.
Remuneration policy for non-executive directors
Element
Purpose and link to strategy
Operation
Maximum opportunity
Non-executive
Board chair fees
To attract and retain high-calibre
chairs who have the necessary
experience and skills. To provide
fees which take account of the
time commitment and
responsibilities of the role.
Other non-
executive fees
To attract and retain high-calibre
non-executive directors with the
necessary experience and skills.
To provide fees which take
account of the time commitment
and responsibilities of the role.
The chair receives an annual fee, plus a fee
for chairing the Nominations Committee.
The committee reviews the chair’s fees
periodically.
We may also pay fees reflecting additional
time commitments or time required to travel
to Board meetings.
In addition, to assist with the performance of
his duties while in the UK, the chair has the
use of a car and driver with the company
settling any tax due.
Non-executive directors are paid a basic fee.
We may also pay additional fees to reflect
extra responsibilities or time commitments,
for example, for Board committee chairs,
senior independent directors or designated
non-executive directors, or time required
to travel to Board meetings.
While there is no maximum fee level,
we set fees by reference to market
data for companies of similar size and
complexity.
Non-executive directors’ fees are
reviewed periodically by the chair and
executive directors.
While there is not a maximum fee level,
fees are set by reference to market data
for companies of similar size and
complexity to Airtel Africa.
We may reimburse the reasonable expenses of directors that relate to
their duties on behalf of Airtel Africa (including tax if applicable). We
may also provide advice and assistance with directors’ tax returns
where these are affected by duties they undertake on our behalf.
If either the remuneration policy or implementation resolutions receive
a significant proportion of votes against, the committee will work with
shareholders to understand the reasons behind these votes and their
concerns.
All non-executive directors have a letter of appointment for an initial
period of three years. In keeping with best practice, non-executive
directors are subject to re-election each year at our AGM. The chair’s
appointment may be terminated by either party with six months’
notice, and the appointments of the other non-executive directors
may be terminated by either party with one month’s notice. Either
appointment can also be terminated at any time if the director is
removed by resolution at an AGM or pursuant to the Articles.
Directors’ letters of appointment are available for inspection during
normal business hours at our registered office and also at our yearly
AGM. All directors have been appointed for a fixed term ending on
the date of our 2022 AGM.
Shareholder context
The committee considers the views of shareholders when reviewing
the remuneration of executive directors and other senior executives
and consults directly with major shareholders about any material
changes to the policy.
Broader employee context
We consider executive remuneration in the context of our wider
employee population. Our remuneration policy for executive directors
is more weighted towards variable pay than for other employees to
make a greater part of their pay conditional on the successful delivery
of business strategy. Our aim is to create a clear link between the value
created for shareholders and the remuneration received by our
executive directors.
Given the diverse spread of geographical locations in which Airtel
Africa operates, employees are not directly consulted on directors’
remuneration. However, employees have the opportunity to express
their views on remuneration arrangements through employee surveys
and other forms of engagement, and these are shared with senior
management and the Board as appropriate.
© 2021 Friend Studio Ltd
File name: DirectorsXRemuneration_v48
Modification Date: 26 May 2021 12:20 pm
Airtel Africa plc Annual Report and Accounts 2021
131
Governance report Directors’ remuneration report continued
Part 3
Annual Report on Remuneration
This report has been prepared by the committee and approved by our Board. As stipulated in the relevant UK regulations, Deloitte LLP have
independently audited these items:
• Executive directors’ and non-executive directors’ remuneration and associated footnotes on page 135
• The table of share awards granted to executive directors and associated footnotes on page 133
• The statement of directors’ shareholdings and share interests on page 135
2020/21 remuneration of directors (audited)
This table sets out the total remuneration for the executive directors for the year ended March 2021. The comparator year, April 2019 to
March 2020, comprises the total remuneration received over the full year, including remuneration received from the Group prior to our
Admission to listing.
All amounts are in $’000
Raghunath Mandava
2020/21
2019/20
Base salary
$888
$817
Benefits1
$168
$185
Pension
contribution2
–
–
Annual
bonus
$1,317
$678
LTIP3
$565
$208
Other4
$600
$1,252
Total
fixed
$1,056
$1,002
Total
variable
$2,482
$2,138
Total
$3,538
$3,140
Notes
1 Benefits include expatriate benefits ($’000), including: housing allowance of $62 (2019/20: $68), education allowance of $35 (2019/20:$30), car allowance of
$56 (2019/20: $58) and home travel allowance of $5 (2019/20: $20)
2 The existing executive directors do not participate in pension arrangements
3 In line with the regulations, the 2020/21 LTIP value has been estimated based on the average price of Airtel Africa shares between 1 January 2021 and 31 March 2021.
This will be restated based on the actual value at vesting in June 2021 in the 2021/22 accounts. For the 2020/21 LTIP the total value attributable to share price
appreciation is $44. The 2019/20 LTIP value shown in last year’s report was calculated with an assumed share price of $ 0.83. The actual share price at vesting was $ 0.44,
and the table has been updated to reflect this change. The estimated value of the award was $392; the actual value was $208 (decrease of $184)
4 For 2020/21, ‘Other’ relates to the final tranche of the one-off deferred cash plan of up to $750,000, which was in place prior to our IPO and disclosed in the prospectus.
Two-thirds of the deferred cash plan was dependent on relative TSR over one year (30% of this element), 2020/21 net revenue (35%) and underlying EBITDA (35%); and
one-third was dependent on service conditions. The TSR performance condition will be measured at the end of May 2021. Performance against that measure and the value
of that element of the award vesting will be disclosed in next year’s accounts. The total of $600,000 represents maximum vesting of the non-TSR elements. Details of the
targets can be found on page 134
For 2019/20, ‘Other’ relates to the payment of the exceptional turnaround bonus of $1m and the one-off deferred cash plan of up to $375,000, both of which were put in
place prior to our IPO and disclosed in the prospectus
Annual bonus
In a challenging year Airtel Africa delivered an exceptional performance, exceeding all key financial metrics. Revenue growth in both constant and
current currency grew double digit, recording the highest growth across the last five years. Underlying EBITDA grew by 25.2%, expanding the
margin by 210 bps and operational free cash flow grew by 48.8%. The performance was broad-based across voice, data and Airtel Money and
resulted in market share gains across key markets.
Performance was equally strong across all the key operational KPI’s. Our customer numbers increased by 6.9% this year, contributing to an
increase in voice revenue. We are also increasingly seeing the success of the rollout of our modernised 4G networks, with a more than 31.2%
increase in data revenues for the year. Alongside this, our focus on increasing the application of our mobile money services through international
partnerships while growing our distribution footprint has driven the expansion of Airtel Money. Importantly the chief executive officer has led the
company’s response to Covid-19, ensuring not only that the key financial and operational targets been exceeded but also that Airtel Africa has
reached across all its stakeholders to ensure the company played its role in in maintaining resilient networks, and providing platforms and
partnerships for the delivery of emergency funding, communication of comprehensive Covid-19 health messaging and providing free data and
connectivity for the education sector.
It is in this context that we have assessed the performance achieved against the incentive targets. The strong in-year performance resulted in the
stretch targets for the financial objectives being exceeded, with the personal objectives also being achieved in full. As a result, a bonus at the
maximum level have been awarded, of which one-third will be deferred into shares for two years.
2020/21 bonus outcomes (audited)
Weighted total
Outcomes (weighted % of maximum)
Raghunath Mandava (weighted % of maximum)
Bonus performance measures
Net revenue
35%
35%
Underlying
EBITDA
35%
35%
OFCF
10%
10%
Personal
20%
Total
100%
20%
100%
132 Airtel Africa plc Annual Report and Accounts 2021
© 2021 Friend Studio Ltd
File name: DirectorsXRemuneration_v48
Modification Date: 26 May 2021 12:20 pm
Governance report Financial objectives
Financial performance was assessed against the underlying net revenue, underlying EBITDA and OFCF ranges set for 2020/21.
All amounts are in $million
Net revenue
EBITDA
OFCF
All targets and achievements are in AOP constant currency as at 31 March 2020
Weighting
(%)
35%
35%
10%
Threshold
(30%)
3,068.4
1,589.4
914.4
Target
(50%)
3,147.1
1,640.1
965.1
Maximum
(100%)
3,225.7
1,698.0
1,022.9
Actual
3,349.4
1,805.5
1,191.5
Personal objectives
Raghunath Mandava
Airtel Money amounts are in $million
Succession planning of critical
positions (MDs + ExCo of the
organisation)
Compliance – internal audit score
Weighting (%)
Target
10% Build and implement succession
plan for MDs + ExCo
10%
Threshold: 65
Target: 68
Maximum: 70
Performance achieved
OPCO MD and Exco
succession plans successfully
submitted and adopted
72.3
Outcome (weighted
% of maximum)
10%
10%
All targets and achievements are in AOP constant currency as at 31 March 2020
Annual bonus awarded
Name
Raghunath Mandava
Awarded
in cash
$887,500
Awarded
in shares
$429,076
Total
$1,316,576
Long-term incentive plan (LTIP) (audited)
LTIP awards granted in 2020/21
On 30 October 2020, the CEO was granted the following LTIP awards.
Raghunath Mandava
Type of award
PSP
RSU
Maximum
number of
shares
975,904
433,735
Share price used
to determine
level of award1
$0.83
$0.83
Face value
$810,000
$360,000
Face value
as a %
of salary
90%
40%
1 Average closing share price for the three dealing days ending on 29 October 2020
RSUs may not vest unless operating free cash flow is positive over the preceding three financial years.
Threshold
vesting
End of performance
period
25% 31 March 2023
n/a
100%
The performance conditions are based on three performance measures – net revenue growth (40%), underlying EBITDA margin (40%) and
relative TSR (20%). For the 2020 awards, performance is measured over a three-year performance period. Net revenue growth provides a key
indicator of long-term growth achieved in the market, underlying EBITDA margin is a key indicator of long-term growth in profitability from our
operations, and relative TSR measures the total returns to our shareholders providing close alignment with shareholder interests. This
combination of measures helps to align the operation of the LTIP with shareholders’ interests and our business strategy.
Airtel Africa operates only in Africa. We have three main competitors, none of whom disclose targets in their remuneration reports. For
competitive and commercial reasons, the Board does not believe it would be in the interests of our shareholders, to disclose our net revenue and
underlying EBITDA LTIP targets. The targets will be disclosed when they are no longer considered commercially sensitive. This will be no later
than the year in which the awards vest. Targets have been based on the 2020/21 three-year plan and will require competitive growth ahead of
market in net revenue at target, with a significant stretch at maximum. The underlying EBITDA from an already high competitive base will be
equally stretching, and both targets will be fully disclosed on vesting. On TSR against the MSCI Emerging Markets Communications Service
Index, threshold will vest at the 50th percentile and maximum will vest at the 75th percentile.
Targets applying to the 2020 performance share plan (PSP) awards
Metric
Net revenue (CAGR %)
Weighting
40%
Underlying EBITDA margin
Relative total shareholder return against
MSCI Emerging Markets Communications
Service Index
40%
20%
Threshold (25%)
3-year plan
minus 15%
Commercially
sensitive
50th percentile
Target (50%)
Based on
3-year plan
Based on
3-year plan
–
Maximum (100%)
3-year plan
plus 15%
Commercially
sensitive
75th percentile
© 2021 Friend Studio Ltd
File name: DirectorsXRemuneration_v48
Modification Date: 26 May 2021 12:20 pm
Airtel Africa plc Annual Report and Accounts 2021
133
Governance report Directors’ remuneration report continued
Part 3
Share awards vesting in relation to 2020/21
Outcomes against each performance condition for awards made to the CEO on IPO, subject to performance measured to the end of 31 March
2021 against the following conditions.1
All amounts are in $million
Metric
Net revenue
Underlying EBITDA
Operating free cash flow
Below threshold
(0%)
<3,068.4
<1,589.4
<914.4
Threshold
(25%)
3,068.4
1,589.4
914.4
Target
(50%)
3,147.1
1,640.1
965.1
Maximum
(100%)
3,225.7
1,698.0
1,022.9
Actual
3,349.4
1,805.5
1,191.5
% achievement
(of maximum)
100%
100%
100%
All targets and achievements are in AOP constant currency as at 31 March 2020
1 10% of the award (for replacement stock awards-PSU) is subject to a TSR performance condition measured at the end of May 2021. Performance against that measure
and the value of the award vesting will be disclosed in next year’s accounts.
For performance between threshold, target and stretch awards vest on a straight-line pro-rata basis.
As a result of this performance, the following awards were capable of vesting:
Raghunath
Mandava
Type of award
2019 LTIP awards
PSP
2019 LTIP awards
RSU
Replacement stock
awards-PSU2,3
Replacement stock
awards-RSU
Earliest date
for vesting
Applicable
performance
conditions
1 Jun 2021 Underlying EBITDA (50%),
net revenue (50%)
N/A
1 Jun 2021
1 Jun 2021 Underlying EBITDA (20%),
net revenue (35%) and
OFCF (35%)
N/A
1 Jun 2021
Maximum number of
shares comprised in
each tranche
99,206
Number
of shares
vesting
99,206
Estimated
value on
vesting1
$108,433
Estimated value
attributable to share
price difference1,3
$8,433
99,206
99,206
$108,433
$8,433
204,498
204,498
$223,517
$17,383
113,610
113,610
$124,176
$9,657
Total
516,520
516,520
$564,559
$43,907
1 The estimated value on vesting is the average price of Airtel Africa’s shares in the period between 1 January 2021 to 31 March 2021 i.e. $1.09 (£0.72).
The estimated value attributable to share price difference is the change from the initial offer price of $1.008 (£0.8)
2 Share price on grant date for all awards was the initial offer price $1.008 (£0.8)
3 The replacement stock award – PSU excludes 22,722 shares which are subject to the TSR performance condition measured at the end of May 2021
10% of the replacement stock awards-PSU which vested on 1 June 2020 was subject to a TSR performance condition measured at the end
of May 2020. Performance against this measure is shown below.
Metric
Relative TSR
Below threshold
(0%)
Continue reading text version or see original annual report in PDF format above