How we sustain value using the six capitals

 

  Key capital inputs     Outcomes of our activities     How we achieved these     The trade-offs  
Human
capital
  2017       2016      
Number of employees 15 901       15 980      
Number of contractors 3 030       4 009      
Gender split (men:women) 63:37       63:37      
Investment in employee training (R million)   252         392      
Number of nationalities employed 63       60      
   
  2017       2016      
Staff costs (R billion) 9,0       9,2      
Voluntary staff turnover (%) 7,0       7,2      
Mean employee culture survey (%) 70       67      
Number of training courses completed 31 118       25 376      
Opcos with Global Investor in People accreditation (see Our people for details)   17         16      
   
  • Refreshed our management team.
  • Invested in targeted training and development.
  • Adjusted regional responsibilities.
  • Encouraged diversity, so workforce understands the needs of our subscribers.
     Employees in 15 of our 22 operating companies and in Manco received bonuses for 2017 as these operations met their financial targets. This positively affected human capital. By outsourcing some functions MTN reduced its stock of human capital to the benefit of intellectual and financial capital.  
Manufactured capital
  2017       2016      
Value of property, plant and equipment (R billion)   91,8**     95,6**  
Capital expenditure (R billion) 31,5**   35,3**  
Number of smartphones on our networks (000)   88 506         82 361      
  • Offices and networks in 24 countries.
  • Access to public infrastructure.
    
  2017       2016      
2G sites rolled out 3 663       2 450      
3G sites rolled out 8 583       8 201      
4G sites rolled out 8 611       7 676      
Kilometres of fibre rolled out 4 364       5 481      
Depreciation (R billion) 19,3**   21,0**  
Impairment of assets (R billion) 3,0**   0,2**  
Impairment of goodwill (R billion) 2,6**   0,9**  
   
  • Focused our capital investment on rolling out new 3G and 4G base stations, data and switching centres and dedicated fibre.
     By expanding our networks, we increase the stock of manufactured capital and reduce our stock of financial capital in the short term. However, ultimately this investment should boost our business and therefore our stock of financial capital in the longer term. By advancing manufactured capital, we negatively impact natural capital. However, by sharing infrastructure and increasing the efficiency of existing infrastructure we are able to mitigate our impact on the stock of natural capital.  
Financial capital
  2017       2016      
Market capitalisation (R billion) at year-end   257         238      
Interest received (R billion) 3,5**   4,4**  
Net debt (R billion) 57,1**   51,9**  
   
  2017       2016      
EBITDA (R billion) 47,0**   40,8**  
Profit/(loss) after tax (R billion) 4,5**   (3,1)**  
Cash generated through operations (R billion) 38,5**   55,7**  
Net debt to EBITDA ratio^ 1,22       1,27      
Net interest paid (R billion) 3,9**       3,7**  
Basic headline earnings/(loss) per share (cents) 182       (77)**  
   
  • Accessed the domestic markets for funding; raised R5,3 billion through the Domestic Medium Term Programme.
  • Continued to maintain and improve on our group liquidity levels.
  • Concluded local currency funding in some key markets including 510 million cedi facility for MTN Ghana.
  • Repatriated R6,5 billion in cash from our Iran operation.
  • Declared total dividend of 700 cents per share.
     By applying financial capital, we are able to grow our business, positively impacting manufactured, human and intellectual capital, as well as social and relationship capital. However, through our use of financial capital to build new telecoms infrastructure we may negatively impact the stocks of natural capital.  
Intellectual capital
  • Our strong and established brand.
  • Our skilled and experienced employees.
  • Our partnerships and joint ventures.
  • More than 20 years’ experience of operating in challenging emerging markets.
    
  2017       2016      
Goodwill and intangible assets (R billion) 38,3**   46,5**  
  • MTN South Africa named most valuable brand in the country (Brand South Africa).
  • Introduced standardised CVM platforms across 18 opcos.
  • Expanded MTN Mobile Money ecosystems to 14 markets.
  • Launched customised offers in 10 opcos.
    
  • Refreshed our brand.
  • Hired specialist skills in customer value management (CVM).
  • Partnering with experts in various fields, such as technology and management consultancy.
  • Creating and maintaining joint ventures and partnerships to expand new revenue streams.
     In the short term, our investment in intellectual capital reduces our stocks of financial capital while boosting in the longer term the stocks of human, financial and social and relationship capital.  
Natural capital
  • Radio spectrum in the 700, 800, 900, 1 800, 2 100, 2 300, 2 600MHz bands.
  2017   2016  
Gigajoules of energy used 19 095 879   13 514 716  
   
  2017   2016  
Carbon emissions (tonnes of CO2 equivalent)◊ 2 006 248   1 609 704  
GHG emissions avoided (tonnes) 1 529   833  
Number of new alternative energy sites• 459   1 001  
E-waste recycled (tonnes) 215   537  
   
  • Secured spectrum in Sudan and Syria in 2017.
  • Ensured resilience to change in climate or increase in extreme weather events on critical infrastructure through business continuity processes.
  • Continued to invest in efficiencies to ensure our technical infrastructure supports service delivery using the least possible amount of energy.
     The short-term input to securing sufficient spectrum is financial capital. By establishing and maintaining an extensive high-quality network and increasingly rolling out 4G sites, our energy consumption for broadband and data services continues to grow. By remaining largely reliant on non-renewable resources, we negatively impact natural capital. However, through infrastructure sharing, the commitment of our tower management partners to prioritise energy efficiency, along with our own efforts and investments in low-carbon power, we are working to mitigate the overall impact on this stock of capital.  
Social and relationship capital
  • Constructive relationships with regulators, customers, trade unions, employees, communities, civil society.
  • Ongoing interactions with government and tax authorities.
  • Regular engagement with shareholders and the investor community on MTN’s plans and performance.
    
  2017   2016  
Total tax contributions (R billion) 27,9   33,5‡  
CSI spend(R million) 172   295,4  
BBBEE status in South Africa† Level 4 (102.65 points)   Level 2 (87.83 points)  
Number of calls to whistle-blower line 119   120  
MTN Mobile Money active subscribers (million) 21,8   15,4  
NPS South Africa (%) Δ 70   81  
NPS Nigeria (%) Δ 26   30  
NPS other key markets (%) 35   25  
   
  • Enhanced management structure to support regulatory compliance and revised key ethics structures and policies.
  • Monitored staff morale through annual culture survey.
  • Extended MTN Mobile Money services to more people.
  • Increased number of certified ethics officers to 27.
  • Elevated regulatory function to executive committee.
  • MTN South Africa made notable improvements in transformation drive.
  • Progressed plans for MTN Nigeria and MTN Ghana listings.
  • Reduced effective data rates by 31% and voice rates by 20%.
     Investment in social and relationship capital reduces our financial capital in the short term. However, by helping to close the digital divide and transform society through our various skills and enterprise development, preferential procurement and localisation initiatives we ultimately build the stocks of social, human, intellectual and financial capital.  
  ** Reported – as reflected in the MTN Group Limited financial results for the year ended 31 December 2017.
  ^ Excluding the Nigerian regulatory fine.
  † Under amended ICT Sector Codes. Level 2 achieved in 2016 is now equivalent to Level 6 under new framework.
  ◊ Higher scope 3 emissions due to more outsourced sites accounted for by MTN than by tower companies.
  • 2016 number revised upwards after reconciliation of alternative energy investments.
  Δ Although actual NPS is lower than prior year, NPS improved relative to nearest competitor.
  ‡ Updated with Botswana number and apportionment of Swaziland numbers.