Speaker #1: Good morning, ladies and gentlemen. On behalf of the Board of Directors, the Management Team, and the entire Safaricom family, I am delighted to welcome you to Safaricom PLC's half-year 2026-2027 results announcement.

Speaker #1: Thank you for joining us today. Both here at the Michael Joseph Center and online, from across the world, literally. And I'll of course make a special mention of Kenya and Ethiopia, because those are the markets that we operate in.

Speaker #1: My name is Caroline Wambugu. I serve as the Director, Group Finance Controls, Performance, and Investor Relations here at Safaricom, and I'll be your moderator this morning.

Speaker #1: It's always a joy to connect and engage with you during such seasons. And indeed, for 26 years, Safaricom has connected people, transformed lives, and powered possibilities.

Speaker #1: Together we have enabled financial inclusion through M-Pesa, supported businesses and entrepreneurs, connected communities, and created lasting social and economic impact. So, as we reflect on the first half of this fiscal year, we do so with gratitude to our customers, shareholders, regulators, partners, communities, and employees who have made this remarkable journey possible.

Speaker #1: For those engaging with us on our social media platforms, our official hashtag today is #SafaricomHYResults. And it's now displayed on your screen: #SafaricomHYResults. And in line with our commitment to diversity and inclusion, our sign language interpreters this morning are: Lensa Odingo, and Joan Vicky.

Speaker #1: Once again, thank you, and welcoming you again to our results announcement, I would like us to just maybe quickly take you through the program flow so that you can appreciate what is to come.

Speaker #1: So this morning we'll begin with remarks from our group chief executive officer, Peter Ndegwa, who will provide a business overview and strategic update. He will be followed by our group chief finance and innovation officer, Dilip Pal, who will present in detail the group's financial performance and results for the period under review.

Speaker #1: Peter will then return to share our outlook and focus areas for the second half of the year. Thereafter, our board chairman, Adil Khawaja, will share his closing remarks before we open the floor for questions and answers.

Speaker #1: And to guide us for that particular moment of Q&A, which I'm sure is a moment we all love as we interact with each other, to my online audience, I would like to, put your attention to the Menti platform.

Speaker #1: This is the platform that we shall use for you to share the questions. Of course, share with us those questions throughout the session, and when that particular moment comes, then we'll be able to engage and the code is 81008756.

Speaker #1: As is now displayed on your screen. We also do have the Menti link shared across all our social media platforms and channels, for ease of access.

Speaker #1: Now, before we begin, I would like to just draw your attention to a statement that concerns our results announcement this morning, because it is important to note that today's presentation may contain forward-looking statements, relating to future performance, strategy, outlook, and business expectations.

Speaker #1: These statements are subject to risks, uncertainties, and assumptions, and should therefore not be interpreted as guarantees for future performance. We trust, as usual, that you will perform your due diligence in the application of the same.

Speaker #1: And now, before I bring on our group chief executive officer, I would like to engage you on a short video and the next voice that you will hear is of our group chief executive officer, Peter Ndegwa.

Speaker #1: Do welcome as we listen together. Thank you.

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Speaker #4: Good morning, everyone. Good morning, those in the room.

Speaker #5: Good morning.

Speaker #4: Great video, isn't it? Yeah, thank you, Caroline. And nice picture. I had to start with that. I hope that the picture being nice also reflects on the results being nice.

Speaker #4: So let's see how it goes. So, fellow shareholders, representatives of the investor community, the board, management, and staff of Safaricom Group, members, of the media, and the online community.

Speaker #4: Invited guests, ladies and gentlemen. Thank you for joining us this morning as we release our results for the first half of financial year 2026-2027.

Speaker #4: Today I'll take you through five areas. First, our latest sustainable business report and how we are bringing our purpose to life. Second, our strategy, and the key highlights for the period.

Speaker #4: Third, our operating environment and the commercial performance of our combined business. And then fourth, our summary of our financial results, which Dilip will unpack in greater detail.

Speaker #4: And then finally, I'll close with our priorities and outlook for the second half. Let me begin with our latest sustainability report. Last week we launched our 15th Sustainable Business Report.

Speaker #4: Covering the year ending March 2026. Over 15 years, we strengthened our leadership in sustainability reporting, and societal impact. This year we strengthened how we measure our impact.

Speaker #4: We now assess the value we create for society and the environment, and how our sustainability strengthens our business over the long term. The report estimates listen to the numbers the report estimates that Safaricom created over 1.24 trillion Kenya shillings in net value for Kenyan society and sustained more than 1.4 million jobs.

Speaker #4: Should clap, please. And I'm sure those online are clapping. These results show that Safaricom growth supports a livelihoods and advances the sustainable development goals, and connects more people to opportunity.

Speaker #4: Let us now look at purpose. Through our foundations, we reached 1.5 million lives. In education, we continue to improve learning outcomes, and expand access to digital learning, through the citizens of the future program.

Speaker #4: And I have to say, we are receiving heartfelt feedback on the difference that this program is making across all the 47 counties. We operate in this country.

Speaker #4: In health, Uzazi Salama and our medical camps are bringing essential healthcare closer to communities. Particularly mothers and newborns. These programs demonstrate what transforming lives means in practice.

Speaker #4: Let us now see how we are supporting passion points and investing in our people. Our community initiatives help turn talent and passion into opportunity.

Speaker #4: Nearly 60,000 young people have participated in this season's Chapa Dimba. Since the program began, more than 42 players have progressed to opportunities in local national and international football.

Speaker #4: Capture the good has also given more than 6,000 young creators a platform to tell positive stories. Internally, our artificial intelligence, or AI evangelist program, which we call PACE, is building AI literacy and equipping our people to solve customer and business challenges.

Speaker #4: Let us now turn to our strategy. We are making great progress in executing our plans towards our vision of becoming Africa's leading purpose-led technology company by 2030.

Speaker #4: At the heart of this is delivering greater value to our customers. We do this by making our services more accessible more affordable, safe, and secure, and increasingly relevant to their evolving needs.

Speaker #4: As we communicated back in May, when we announced our 26 results, our financial year 2027 priorities are clear. We are tailoring our offerings to fit customer needs and deliver greater value.

Speaker #4: We are scaling AI across our business to deepen customer engagement, enhance customer experience, and boost productivity. We are strengthening trust and social impact. We are growing our Ethiopia business sustainably, impacting Ethiopians positively.

Speaker #4: We are making significant progress on what we promised and I will speak into this in more detail shortly. But first, let me explain how we are putting AI to work.

Speaker #4: So AI in Safaricom is no longer a buzzword. We are using AI to improve customer experience, simplify our operations, and strengthen business resilience. Agentic Zuri, intelligent digital journeys, and AI-enabled fraud protection are making interactions simpler, and safer.

Speaker #4: Our AI tools are delivering more personalized experience at scale. Real-time recommendations and tailored offers now reach more than 17.7 million customers every month. That's about half of our active base.

Speaker #4: We are strengthening our AI technology foundations while building our people skills to use these tools effectively. Our focus is clear. To scale AI responsibly, we are at great measurable value for our customers, our business, and our society.

Speaker #4: Turning now to our operating environment, starting with Kenya. Kenya economy remains the main resilient. Supported by economic growth and a relatively stable currency. However, higher food, fewer and transport costs continue to put pressure on household incomes.

Speaker #4: As such, customers are increasingly seeking value. So we must remain affordable without compromising quality or reliability. As regulation evolves, particularly in satellite connectivity and financial services, we continue to engage constructively with government, regulators, and industry stakeholders.

Speaker #4: Through these shifts, we remain agile and focused on sustainable growth, whilst maintaining trust that our customers place in us. Turning on to our consumer business in Kenya and the highlights in this business.

Speaker #4: We are using analytics to anticipate customer needs, and deliver more personalized segment-led experiences. We are expanding digital access through more affordable pathways to device ownership.

Speaker #4: We now have over 34 million 4G-enabled devices on our network. And we are making it simpler for customers to access care by digitizing more customer care journeys across our dealer and franchise network.

Speaker #4: Ultimately, we are connecting more customers; we are deepening engagement; and we are building lasting relationships that drive sustainable growth. In financial services, our focus is on strengthening M-PESA core offerings, whilst building the next generation of financial services growth.

Speaker #4: We continue to deliver greater value, with approximately 80% of our merchants transactions now free. You heard that right, by the way. Across our 4.5 million merchants, we are bringing payments, savings, and credit closer to the customer.

Speaker #4: We are also expanding access to credit where we now serve approximately 17.5 million active credit customers on a monthly basis. Our ambition is to build on the strength and the trust of M-PESA, and to expand financial services giving customers more options and value.

Speaker #4: Let me now turn to how we are leveraging our fintech 2.0 platform, which we invested recently. Our investment in fintech 2.0 is translating into services that meet that fit more naturally into our customers' lives.

Speaker #4: Solutions such as ShirikiPay are enabling groups to manage money together. QR codes tap-to-pay and integrated point-of-sale solutions like the one you saw on the video are making everyday payments simpler, more secure, and more convenient.

Speaker #4: Across all these innovations and including the core, trust and privacy remains fundamental, and we are using this platform to enable that. Together, these solutions are moving M-PESA beyond transactions into a broader trusted financial system into a broader trusted financial services ecosystem.

Speaker #4: Let me now briefly talk about our one app. This is our House of Value, bringing connectivity, financial services, e-commerce, and personalization together in one seamless digital experience.

Speaker #4: It gives customers one access point to the Safaricom ecosystem, where they can manage their connectivity and M-PESA services. Since its launch at the start of the financial year, 7.3 million customers have downloaded the app, including 4.5 million active users on a monthly basis.

Speaker #4: Together, they have generated 800 million transactions, worth $2 trillion, Kenya shillings. The platform is already demonstrating its potential as a significant engagement and growth engine.

Speaker #4: We will retire the legacy M-PESA app and my Safaricom app, transitioning customers over the coming months into the one app. Our aim is to deepen customer engagement and drive growth by making my one app the central hub for customer services, including a loyalty platform.

Speaker #4: I hope all of you in the room have the app. And if you don't, I'm sure we'll get you to download the app before you leave.

Speaker #4: Let me now turn to how we are using technology to create more value, for private and public sector enterprises. We are moving beyond connectivity into technology solutions that solve more enterprise customer needs.

Speaker #4: By combining connectivity with cloud, cybersecurity, Internet of Things, which we call IoT, and managed services, we are providing integrated solutions tailored to the needs of different organizations.

Speaker #4: Solutions such as my SACO and SD1, which is short for Software-Defined Wide-Area Network, demonstrate this shift, helping organizations digitize their operations and work more efficiently and operate more securely.

Speaker #4: In the public sector, we are scaling digital platforms across healthcare, social protection, agriculture, and economic empowerment. Our digital solutions are helping essential services reach more people, whilst positioning Safaricom as a trusted technology partner.

Speaker #4: Let me now turn to fixed broadband and our ambition to connect more homes and more businesses. We are expanding fiber and 5G fixed wireless, using the right technology to reach each community to bring reliable, high-speed connectivity to more homes and businesses.

Speaker #4: Importantly, we are widening access through tokenized Wi-Fi. This allows customers to buy connectivity in smaller more affordable packages based on their needs. We are also bringing fixed broadband and mobile connectivity together, in one proposition, with faster speeds, digital content, online safety, and smart home solutions creating greater value for households.

Speaker #4: Let us now turn to Ethiopia and its operating environment. Ethiopia continues to offer strong long-term potential. This is supported by its large youthful population.

Speaker #4: Economic reform and a growing demand for digital services. The successful conclusion of the recent election and formation of the new government provides greater political certainty although localized security risks remain.

Speaker #4: The economy is resilient. Despite inflation and currency pressures, the conflict in the Middle East also disrupted fuel supply and increased transport costs. This has affected customer affordability, and temporarily slowed our network rollout.

Speaker #4: We are navigating these pressures with discipline, whilst growing our customer base making better use of our network and building long-term value for Ethiopia and Ethiopians.

Speaker #4: Let us now look at how our business is growing and what that means for our customers. We now serve 15.4 million customers Ethiopia team deserves a clap for that.

Speaker #4: This is a business that didn't exist four years ago. So we now serve 15.4 million customers with a focus on deepening usage and improving network utilization.

Speaker #4: We are targeting connectivity investment where demand is strongest, using personalized offers, digital recharge, and simpler onboarding to grow adoption and improve customer experience. M-PESA remains a key growth driver as we expand digital distribution and merchant payments.

Speaker #4: In fixed and enterprise, fixed fiber partnerships and 5G fixed wireless access are enabling us to expand efficiently. Regulator-led interventions are also helping build a more sustainable industry, and we want to recognize that.

Speaker #4: But further action is needed particularly on minimum cost-led price correction in that market. We continue to engage constructively with regulators and key stakeholders. Now, I'm sure this is what most everyone has been waiting for.

Speaker #4: I'm sure you are wondering why is Peter spending so much time on all the front-end detail. Let me now summarize our financial performance. Safaricom Kenya's service revenue I'll need to read this very slowly.

Speaker #4: Safaricom Kenya's service revenue grew by 11.3% to 216 billion Kenya shillings. Earnings before interest and tax, which is EBIT, grew by 13.7% to 101.8 billion Kenya shillings.

Speaker #4: And net income, which is very important for shareholders, rose by 13.8% to 66.3 billion Kenya shillings. This and you'll hear the word I'll use this solid results reflect the strength of our Kenya business and disciplined execution.

Speaker #4: You know you have to remain humble because it's still halftime it's halftime and you have to remain humble. You still have the second half to go.

Speaker #4: So that's on Kenya. In Ethiopia, service revenue grew by 71.6%. To 10.6 billion Kenya shillings. Contributing just under 17% to group service revenue growth.

Speaker #4: So almost 20%. Yeah? Ethiopia's loss and this is the important number Ethiopia's loss before interest tax depreciation and amortization long what? EBITDA narrowed by 96.5 to only 400 million Kenya shillings.

Speaker #4: So we talked about EBITDA break-even by the end of this financial year. At the end of H1, we are a loss of 400 million Kenya shillings equivalent.

Speaker #4: So on Ethiopia, growing revenue and a better network utilization are moving Ethiopia closer to EBITDA break-even by the end of this financial year. Group service revenue grew by 13.1% to 226.1 billion Kenya shillings.

Speaker #4: And EBITDA at a group level rose by 27.5% to 129.2 billion Kenya shillings. For those who know the exchange rate, that's about a billion dollars.

Speaker #4: At a group level, for the half one, for EBITDA. Group EBIT, which is earning before interest and tax, grew by 40% to 91.1 billion Kenya shillings.

Speaker #4: You can see the reduction in startup losses in Ethiopia starting to really make impact at a group level. And also the

Speaker #6: the solid performance in Kenya. And at a group level, net income increased by 35.9% to 58.2 billion Kenya shillings.

Speaker #7: So this results

Speaker #6: reflect sustained growth in Kenya. Lower startup losses in Ethiopia. And of course, disciplined execution of our strategy across the group. And on that very positive note, I want to invite Dilip to take you through the results in much greater detail.

Speaker #6: Thank you very much.

Speaker #7: Morning, everyone. That was all actually.

Speaker #8: And my job is to just thank you, both the online joiners and in person, for joining us and bless us today. Okay, good morning once again.

Speaker #8: Let me start my presentation. So thank you so much, Peter. To, to the Kenya colleagues, to the Kenya community, hamjambo, and to the Ethiopia community, and everyone who has joined online.

Speaker #8: I'm Damin Adilachu. It's truly, truly a pleasure to welcome you all, and thank you for joining us. For our half-year results presentation, I am delighted to take you through our financial performance.

Speaker #8: Now, picking up from Peter's remarks, I just want to reiterate, we delivered a very, very strong set of results reflecting continued execution of our strategy and momentum across the business.

Speaker #8: Please note, as always, you will get to see the full results materials in a while, as soon as we finish our presentation. Let me start with Kenya, Kenya performance, then I will take you through the Ethiopia performance, and then I will talk about the group performance.

Speaker #8: So as always, we start with customers. Very strong momentum on customers. Half-year, 90-day customers, we closed with 63.6 million customers. Yeah, you heard it right, in Kenya it's higher than population, but you know the reason for that.

Speaker #8: And 1-month active base also grew by 7%. To 40.6 million, uh, 40.6 million. And we are not only growing customers, we are also growing our ARPU.

Speaker #8: So 1-month active customers ARPU actually grew by 4% year over year. Customer numbers for both M-Pesa and fixed services grew double digit. Reflecting continued customer adoption across our broader ecosystem.

Speaker #8: As Peter highlighted earlier, we continue to deepen customer engagements through relevant and more innovative propositions. Powered by our CBM engine, also enabled by artificial intelligence.

Speaker #8: Our focus remains on growing the customer base while deepening engagements and value across our services. Now let me give you a breakdown of our service revenue.

Speaker #8: As you heard from Peter, Kenya service revenue grew by 11.3% to touch 216 billion shillings. And M-Pesa remained the primary growth engine, delivering revenue growth of 13.6% year on year and crossing 100 billion shillings in half-year revenue.

Speaker #8: for the first time. M-Pesa contributed 55% of the incremental service revenue. And now accounts for 46.3% of total service revenue. Connectivity revenue, which, which still resilient and actually growing 7.7% year on year.

Speaker #8: And supported by sustained momentum in mobile data and resilient growth in voice. Fixed and IoT revenue growth accelerated. You have seen our full year results last year.

Speaker #8: We are slightly lower. So this year we are— half year we are reporting 25.5% year on year. Driven by customer growth and also a new stream of revenue that we started recording from this year, which is the public sector digitization revenue.

Speaker #8: I'll talk about that later. And now I'll go through the detailed performance by business segments one by one. Starting with M-Pesa, as always. Very strong growth momentum, as I mentioned.

Speaker #8: Payments continued to remain the anchor of our M-Pesa portfolio, with both consumer and business payments growing 14% year over year. At the same time, we continue to scale new growth areas.

Speaker #8: With financial services revenue growth now accelerating to 55% year on year. Customer engagement also depend with chargeable transactions per customer per month increasing by 31.5% to 51.

Speaker #8: So we actually crossed the 50 milestones of chargeable transactions per customer per month in this half year. This underscores M-Pesa's integral role in customers' everyday lives as we expand beyond payments into a broader financial services ecosystem.

Speaker #8: Still on M-Pesa? Now we talk about transactions. So overall transactions volume for M-Pesa grew by 25%. Year on year, which is also an accelerated growth.

Speaker #8: But more importantly, value of M-Pesa also grew by close to 17% year over year. Something interesting, transaction volumes in diversified growth areas. You know how we define diversified growth areas, which basically comprise business payments, global payments and financial services.

Speaker #8: That grew— that transaction volume grew by 56%. And which is much faster than our growth in traditional areas. And this shift clearly demonstrates the continued evolution of M-Pesa beyond payments as customers increasingly use the platform for a broader range of financial services.

Speaker #8: Now on the merchant side, as I said, payments continue to be the anchor of our growth engine. And now let me take you through the business payment side.

Speaker #8: So business payments roughly contribute 1/3 of our growth in M-Pesa revenue as well as the M-Pesa volume. So volume grew 26% year on year.

Speaker #8: Supported by the continued expansion of our merchant ecosystem. You heard Peter saying we now reached 4.5 million merchants. Within that, Lipa na M-Pesa merchants, what you call the formal merchants, now reached 1.3 million merchants and Pochila Bya Ashara merchants, which are the informal merchants, number doubled to 3.2 million.

Speaker #8: Which is actually expanding digital payment acceptance across both formal and informal commerce. And following our launch of Patamore campaign to give more value to both customers and merchants, merchant transactions volume growth.

Speaker #8: was very strong. It was 53% year over year. This reinforces our ambition to digitize informal commerce and deepen M-Pesa's role in everyday business transactions across the country.

Speaker #8: We are encouraged by strong business payments momentum and remain focused on sustainable merchant solutions that drive digital adoption. You're still wondering? I'm still on M-Pesa.

Speaker #8: Now, Breaking down the financial services, which as I said includes credit, wealth, and insurance, we made great progress in first half. Credit consumers, credit customers, grew 84% to touch 17.5 million.

Speaker #8: Customers with credit revenue growing 54% year on year. This growth was underpinned by the improvement that we have done in behavioral scoring as well as targeted enhancements to customer limits, driving the value disbursed up by 70% year on year.

Speaker #8: to Kenya shillings 1.3 trillion. Beyond credit, we are seeing strong adoption of our wealth propositions with customers more than doubling to 3.4 million and assets under management reaching Kenya shillings 25.6 billion.

Speaker #8: More importantly, we are extending access beyond individual customers, and Peter did mention about it, with our credit and wealth propositions now available to Pochila Bia Shara as well as Tulipan M-Pesa merchants.

Speaker #8: This further advances financial inclusion across our ecosystem, enabling both consumers and businesses to move beyond payments into credit, savings, and wealth management. Now let me move to connectivity business.

Speaker #8: Now, as I mentioned, connectivity business grew 7.7% year on year. The portfolio mainly comprises of mobile data, voice, and messaging. Mobile data remained the growth engine, growing 12.2% year on year and contributing 2/3 of the connectivity revenue growth.

Speaker #8: Voice remained resilient, growing 6.2% year on year. We remain focused on delivering innovative segment-led propositions reflecting in the revamp of our data bundles to deliver greater value to our customers and sustain usage.

Speaker #8: I will now give a little bit of details about mobile data and voice. Starting with mobile data, revenue momentum, as I mentioned, remains strong.

Speaker #8: Usage grew by 9.4% with average usage per customer reaching to 5.3 GB per customer per month. Our revamped data proposition continues to drive adoption with customers consuming more than 1 GB growing 17.7% year on year.

Speaker #8: to 15.2 million. As we continue to increase value to our customers, the effective rate per MB declined by 10.8%, stimulating higher consumption and broadening access.

Speaker #8: Now, A great story on voice. 6.2% year-on-year growth, and you heard us talking about it over a long period of time that voice don't expect growth.

Speaker #8: Mid to— okay, low single-digit growth or a decline could be accepted. But actually we turned that around. 6.2% growth, a significant turnaround from a 2.1% decline recorded same period last year.

Speaker #8: And this improvement was driven by our segment-led propositions, which increased usage by 11.9% to 232 minutes. You heard me right. Voice usage per customer is growing, still growing, to 232 minutes.

Speaker #8: And this is, I think, 4th or 5th year in a row Our usage per customer on voice is growing. So overall, the performance demonstrates that our segment— segmentation strategy is stimulating usage while sustaining revenue growth across the connectivity portfolio.

Speaker #8: Now moving to the last segment of the business, which is the fixed and IoT. As I mentioned, 25.5% growth. Driven by customer growth, consumer fixed customers growing 33.6% year on year and enterprise customers growing 23.6% year on year.

Speaker #8: We also continue to expand our addressable footprint with homes passed increasing 13.6% year on year to over 917,000. We fell short of 1 million and hopefully by year end should be able to announce our 1 million mark on the homes passed.

Speaker #8: Similar growth was also noted in our IoT solutions. Growing 32.8% year on year to close at 2.4 million.

Speaker #7: Customers.

Speaker #8: As Peter highlighted earlier, public sector digitization is becoming an increasingly important opportunity for us. During the period, we recorded Kenya shilling 820 million in revenue from initiatives including digital health and pension scheme digitization.

Speaker #8: Demonstrating the growth opportunity in this segment. Together, this provides a strong foundation to deepen penetration and sustain growth across our fixed public sector

Speaker #7: and IoT business.

Speaker #8: Now let's look at our cost base. We maintain a very disciplined cost management despite inflationary and fuel-related cost pressures. Direct cost grew by 3.8% year on year on an adjusted basis, as we have done an accounting change in terms of how we account for our SIM cards.

Speaker #8: Headline is growing 12.4%, but adjusted, which is a one-time adjustment, is growing 3.8%, with the contribution margin holding at 74.7%. Operating costs grew by 9.3%, largely reflecting pressure from energy costs, which increased 22% due to Middle East crisis.

Speaker #8: Energy costs remain firmly on our watchlist as we drive efficiencies to mitigate the impact on our cost base and protect margins. Despite these pressures, OpEx intensity remained stable at 17% for the longest time, demonstrating continued discipline in managing our cost base.

Speaker #8: I'm also pleased to share that we recorded a notable reduction in interest costs supported by stability in the macroeconomic environment. Our focus remains protecting margins through disciplined cost management while optimizing our funding structure.

Speaker #8: Now, to bring this all together for Kenya, you have seen these numbers from Peter's presentation. So Just to highlight few things. 2026 H1, very, very strong performance, and this is towards our execution of our Vision 2030 strategy.

Speaker #8: The business delivered double-digit growth across all financial metrics. Demonstrating strong and broad-based momentum, which we call the quality of earnings. EBIT and net income grew ahead of revenue at 13.7% and 13.8%, reflecting disciplined cost execution and operating leverage.

Speaker #8: Operating free cash flow delivered the strongest growth at 19.6% year-on-year, underpinned by strong EBITDA growth and also efficient working capital management. These results demonstrate our ability to translate strong revenue growth into faster profit growth and cash generation, reinforcing the quality of our earnings.

Speaker #8: Now let's look at Safaricom Ethiopia performance. Again, starting with customers. You already clapped for 15 million, crossing 15 million mark. So that's what the numbers that you're reporting for the half year for Ethiopia.

Speaker #8: Again, you can clap. I would say growth was broad-based. Across our key services, both voice and mobile data, we added 3 million customers both in voice and data.

Speaker #8: And we are also seeing stronger engagement with our customer base with 1-month active customers ARPU increasing 35.6% year on year. Now, to give you a little bit of flavor on the service revenue, grew by 17.6%, you already heard that, but more importantly in local currency, this is in Kenya shillings, 71.6%.

Speaker #8: In local currency, service revenue doubled to ETP 13.1 billion.

Speaker #7: Thank you.

Speaker #8: Mobile data remained the primary growth engine with revenue increasing 90% year on year to Kenya shillings 7.9 billion and now accounting for 74% of service revenue.

Speaker #7: Voice remained resilient.

Speaker #8: Growing revenue by 20.9% year on year. The performance clearly reflects strong customer engagement with increased usage translating into accelerating revenue growth. Just to give you again a breakdown of mobile data and voice.

Speaker #8: Mobile data, very strong momentum. You heard already, but I mean, in terms of ETB terms, mobile data revenue touched now 9.7 billion ETB. And this— I mean, mobile data stands out clearly.

Speaker #8: Because if you— the usage consumption now reached 7.7 GB, and you saw Kenya was 5.3 GB. So you can actually clap for that, for the team.

Speaker #8: And with mobile data ARPU growing 51% year on year. Overall, the outlook remains promising as we continue to deepen customer penetration and drive usage from our growing customer base.

Speaker #8: Ethiopia, always we present our funding status. So this is the funding status as of 30th September. Total funding as on 30th September stood at $2.8 billion, which is an increase of $193 million from September base— from March base, actually, from March 26th.

Speaker #8: And part of the funding was deployed to settle outstanding vendor obligations. You always show deferred vendor payables. You see reduction there. That's also part of the funding you have used.

Speaker #8: During the period, the business also secured US$40 million equivalent in local currencies and US$65 million foreign currency to fund ongoing business operations. Overall, the business remains well funded with an increasing focus on leveraging Ethiopia balance sheet through debt funding.

Speaker #8: And that's visible in the debt-to-equity. As you can see that debt-to-equity now reached 20%, which clearly represents an important evolution in the funding model.

Speaker #8: As the business continues to scale. And if you recall, for the longest time we only had equity, there was no debt. Now Ethiopia performance.

Speaker #8: You have seen the headline already from Peter's presentation. What do I highlight here? I highlight EBITDA losses, which was a loss of 12.6 billion H1 last year.

Speaker #8: Now we are reporting a loss of 434 million. Yeah. Which is, which is a continuous improvement as you have spoken about it before. Startup losses is the net losses after adjusting minority interest reduced by 43%.

Speaker #8: To 8.8 billion in half year, and this clearly. Shows the improvement in Ethiopia's financial results and also increasingly translating into stronger group financial performance, which I'll come later.

Speaker #8: Now this half year clearly reinforces our confidence in the path to EBITDA breakeven, which I'm sure all of you are waiting. And we all remain firmly focused on delivering that milestone.

Speaker #8: Now on the group performance, let me start with CapEx. So your CapEx, as far as CapEx spend is concerned, for the half year we are on plan, slightly declined compared to last year.

Speaker #7: Which is basically.

Speaker #8: coming from lower CapEx in Ethiopia, which is also as per plan. And in Kenya, CapEx continued to grow. As you invest in network capacity and coverage to deliver an unmatched customer experience.

Speaker #8: Group CapEx intensity remains stable at 17.3%. Reflecting continued disciplined investment across the group. H1 CapEx remains within the plan, as I mentioned, and this is clearly reflecting the group's increasing focus on capital allocation efficiency.

Speaker #7: On the group net debt,

Speaker #8: We continue to optimise our funding structure by shifting towards more longer-term financing at optimal interest rates. And this is reflected in our debt maturity profile, with long-term debt now accounting for 2/3 of our total debt.

Speaker #8: Net debt to EBITDA, and actually for Kenya it will be even higher because this also has short-term loan for Ethiopia. Net debt to EBITDA remains stable, maintaining a healthy leverage position despite the increase in absolute net debt.

Speaker #8: We have strengthened the debt maturity profile while reducing financing costs, giving the group a more efficient and sustainable funding structure. Now, To summarize our group performance,

Speaker #7: As I said,

Speaker #8: Very strong growth across all key financial metrics. With the improving performance in Ethiopia increasingly reflected in our consolidated results.

Speaker #7: Service revenue

Speaker #8: You saw 13.1% growth. Now Ethiopia contributing 17% of that incremental growth. EBITDA grew significantly ahead of revenue at 27.5%, also contributed by Ethiopia's lower losses.

Speaker #8: And EBITDA margin improved to now— group EBITDA margin is now 55.3% compared to 49.5% same period last year. And this is clearly, again, as you see, Ethiopia losses coming down, it's coming closer to the Kenya margin.

Speaker #8: So as you have seen that Kenya EBITDA margin is about 57%. Net income excluding minority interest grew 35.9% to Kenya shillings 58.2 billion, reflecting the stronger underlying group performance.

Speaker #8: Operating free cash flow grew fastest at 59.1%. Benefiting from stronger EBITDA, lower CapEx, and better working capital management. Overall, we are seeing a strong operating leverage across the group, with revenue growth translating into significantly faster earnings and cash flow growth Ladies and gentlemen, this brings me to the end of my presentation.

Speaker #8: And just to mention again, the results materials will be available on our website shortly. Thank you for your time. Back to you, Peter, for additional remarks.

Speaker #7: Thank you. Thank you, Dilip.

Speaker #6: Let's clap for the CFO. You know, as we were preparing for, uh, for this release, I was saying to the— these are dream results for a CFO.

Speaker #6: So happy to see Dilip very happy today. So let's clap for him again. So thank you, Dilip. And let me close by drawing out the key messages from our results.

Speaker #6: But I'm sure all of you take many messages from here. Um, so the first I wanted to talk about Kenya. So Kenya has delivered across the board, growth across the board.

Speaker #6: And this will be the 4th year where we are delivering double-digit growth in Kenya. I know it's just half one, but this will be the 4th year that we are delivering double-digit in Kenya.

Speaker #6: At a top-line level. This has been supported by disciplined execution and stronger customer engagement. You saw we are growing customers, we are growing usage, and we are actually reducing price.

Speaker #6: So making it— making the business much more affordable and expanding offerings. And also that translates into healthy cash generation. On the M-Pesa side, we are leveraging the investment that we have made in FinTech 2.0 to make sure that we can scale our business going forward.

Speaker #6: Whilst AI— and I said AI is no longer theoretical in Safaricom— is helping us unlock new growth areas and improve experience, in particular improve experience for customers.

Speaker #6: So Kenya is a great story. And Ethiopia, I know it has been hard work, but the results are starting to show. Ethiopia is gaining scale with customer growth now in what we call scale frame.

Speaker #6: So we defined and when we had an investor forum in Ethiopia 3 years ago, we said scale for Ethiopia is customers between 15 and 20 million customers.

Speaker #6: We crossed that number this year. And scale on the network side is closer to 4,000, and we are close there. We are gaining scale with customer growth, stronger network utilization which we've already built, and growing M-Pesa adoption.

Speaker #6: You've seen M-Pesa is starting to show green shoots. Bringing the business closer to EBITDA breakeven. And I need to reinforce that going forward you are going to see a lot more contribution of Ethiopia to our top and bottom line, and this half contributing just under 17% of our group service revenue growth, demonstrating its increasingly importance— increasing importance to our long-term performance of the group.

Speaker #6: So H1 results gives us confidence. I know we are at— I won't say which team I support because I'll be in trouble in our business, but my team knows who I support.

Speaker #6: But given that we are halfway through, it gives us confidence that we'll deliver the financial year '27 priorities. That we promised everyone at the beginning of the year, and also the guidance to investors.

Speaker #6: So as we look at the second half, what are we going to focus on? We'll sustain momentum in connectivity and financial services. Scaling fixed broadband enterprise and public sector solutions.

Speaker #6: We'll also deepen customer trust through simpler experiences and build a more resilient network, but also a safe secure digital platforms. We'll accelerate the use of AI, as I've spoken, across the business to improve experiences.

Speaker #6: for customers, support better decisions internally, and drive greater productivity. And in Ethiopia, we will sustain the commercial momentum that you have seen, deepen M-Pesa usage, and remain focused on achieving EBITDA breakeven by the year end.

Speaker #6: By the way, for investors, that's not guidance, right? But you can see the We are not foul. So on guidance, which is what I want to reiterate, we retain our financial year '27 guidance supported by what you've seen— continued growth in Kenya.

Speaker #6: A significant reduction in Ethiopia's startup losses, and a stronger group profitability, as you'll have seen from Dilip's presentation. And our capital investment, which is— which we call CapEx, which is the investment in all the infrastructure, will remain unchanged in terms of guidance, supporting growth in Kenya.

Speaker #6: But also as Ethiopia transitions to a more normal investment profile. So as I conclude, before I invite our chairman for his closing remarks, I want to thank our customers in both markets for their continued trust.

Speaker #6: And for choosing Safaricom to connect, to transact, and to participate in the digital economy. I also want to thank our employees across our 2 markets of Kenya and Ethiopia for their dedication, innovation, and focused execution.

Speaker #6: And it's reflected in the results. They are central to the service that we provide and the progress that we are making as a business.

Speaker #6: To our agents, dealers, suppliers, technology and financial partners, the governments and regulators in both Kenya and Ethiopia, thank you. For helping us serve our customers.

Speaker #6: And finally, I want to thank our board, uh, led by Chairman Adil and some of our board members represented in the room and online.

Speaker #6: And our shareholders for their confidence and support. Together we are building a more connected, a more inclusive future, and creating sustainable value. And now I want to invite our chairman to make his remarks.

Speaker #6: Thank you very much.

Speaker #8: Wow. What a morning. Did you see the numbers? Positive double-digit growth across the full gamut. Group EpiDa, did you hear? $1 billion US dollars.

Speaker #8: And that's only the first half, guys. Thank you, Peter and Dilip, for your humility in communicating these very phenomenal results. Both of you were extremely modest.

Speaker #8: Thank you. I couldn't be happier and more proud of the entire team. Thank you. Good morning. Shareholders, representatives of the investor community, the board, management, staff, Staff of Safaricom PLC, members of the media and the online community, invited guests, ladies and gentlemen, welcome once again.

Speaker #8: Let me begin by congratulating Peter and the management team and all our colleagues across Kenya and Ethiopia on the strong performance we have reported today.

Speaker #8: As you have heard from Peter, group service revenue at 226.1 billion, very impressive. But what's even better is the fact that Ethiopia has contributed almost 17% and, and is almost a positive EBITDA now.

Speaker #8: These are superb results, particularly when viewed against the environment in which they were achieved. The cost of living continues to place pressure on households and businesses.

Speaker #8: Competition is intensifying, technology is evolving rapidly, and the regulatory environment in both markets continues to change. Despite these challenges, Safaricom has continued to grow, invest in its future, deliver value to its customers and shareholders.

Speaker #8: For the board, These 6-month results demonstrate the strength of our business and its ability to sustain growth in the years ahead. Safaricom's Vision 2030 is to become Africa's leading purpose-led technology company.

Speaker #8: Our responsibility as a board— and I, I am happy to see some of our board members here— is to ensure that we have the right strategy, leadership, and financial discipline to deliver on that ambition.

Speaker #8: Safaricom has enjoyed considerable success over the years. We have built a strong business, earned the trust of millions of customers, and established ourselves as a leader in the telecommunications and financial services sector.

Speaker #8: But we cannot assume for one moment that what made us successful in the past will necessarily guarantee our success in the future. Our competitors are not standing still.

Speaker #8: Customers' expectations are changing. New technologies are creating opportunities for others to challenge established business models. We must therefore continue to innovate, improve the experience we offer to our customers, and remain prepared to challenge the way we do business.

Speaker #8: Kenya remains the foundation of the Group and continues to account for most of our revenue, earnings, and cash generation. The Kenyan business has surpassed $100 billion in EBIT in a 6-month period.

Speaker #9: This is a remarkable achievement and one that deserves recognition. I think you guys should clap again. It demonstrates the strength of our business, the loyalty of our customers, and the quality of the execution by Peter and his team.

Speaker #9: With over 64 million customers in Kenya alone, we have responsibility to continue delivering reliable, affordable, and innovative services. Investments in our networks, new products, and growth opportunities rest on the financial strength of our Kenyan business.

Speaker #9: It is therefore essential that we continue to protect and strengthen this foundation. Ladies and gentlemen, I would like to make particular mention of M-Pesa.

Speaker #9: For the first time, M-Pesa has crossed 100 billion shillings in revenue in a 6-month period. This is another significant milestone for our business. M-Pesa has transformed the way millions of people transact, save, borrow, and conduct business.

Speaker #9: It has become an important part of Kenya's economy and one of Safaricom's greatest achievements. But the opportunity that lies ahead is even greater. We must continue to develop M-Pesa beyond its traditional payments business and expand the range of financial services and digital solutions available to our customers.

Speaker #9: Our challenge is to ensure that we continue to innovate, remain competitive, and develop products that are relevant, accessible, and affordable. The same applies to our connectivity, fixed broadband, and enterprise business, where we continue to see opportunities for growth.

Speaker #9: However, maintaining our leadership requires more than just expanding our product offering or increasing our market share. Consistent service quality, which staying close to our customers and understanding their changing needs is imperative.

Speaker #9: Customer loyalty can never be taken for granted. It must be earned every day and every day. Let me turn to technology and the value of our investments.

Speaker #9: Technology is changing the world around us at an extraordinary pace. Artificial intelligence, data analytics, New digital platforms are transforming industries, changing customer expectations, and creating new business opportunities.

Speaker #9: For Safaricom, these developments present both opportunities and challenges. More efficient networks and higher productivity must go hand in hand with better customer experience and the products we embrace— and the products as we embrace technology.

Speaker #9: At the same time, we must recognize that technology is enabling new competitors to challenge established businesses. The Board expects management to remain ahead of these developments and ensure that Safaricom continues to lead rather than simply respond to change.

Speaker #9: But investment in technology must be accompanied by clear commercial objectives and measurable results. We should not judge our progress simply by how much we invest, but by the value those investments create.

Speaker #9: Ladies and gentlemen, now turning to Ethiopia. We remain very encouraged by the progress being made in this important market. Ethiopia has more than doubled their service revenue, growing by 102% to 13 billion birr.

Speaker #9: We now serve 15.4 million customers. Ethiopia represents a significant long-term opportunity for the group. With its large population and considerable potential for increased access to connectivity, financial services, and digital solutions, we believe that there is substantial room for continued growth.

Speaker #9: The experience and capabilities we have developed in Kenya provide a strong foundation for our ambitions in Ethiopia. However, our success will depend on our ability to understand the particular needs of that market, strengthen customer relationships, and execute our strategy effectively.

Speaker #9: Effectively. The board remains committed to this investment and encouraged by the progress achieved. Ladies and gentlemen, our strategy depends on strong partnerships. The scale and importance of Safaricom's operations mean that we cannot deliver our strategy alone.

Speaker #9: Constructive relationships with governments, regulators, investors, customers, and our business partners remain essential to our success. We value those relationships. We support regulation that protects consumers, promotes fair competition, encourages innovation, and strengthens confidence in the digital economy.

Speaker #9: At the same time, the regulatory frameworks must recognize that substantial long-term investments required to build and maintain telecommunications and financial service infrastructure. We appreciate the continued engagement of the governments of Kenya and Ethiopia, together with their regulators and policymakers in both markets.

Speaker #9: Our shared objective must be to extend access to affordable connectivity, financial services, and ensure that technology creates opportunities for more people. As Peter mentioned earlier, we recently launched our 15th sustainability report.

Speaker #9: Again, listen carefully. The report estimates that Safaricom's activities generated approximately, and I'll say this slowly, 1.25 trillion shillings in value for the Kenyan society.

Speaker #9: This is no small feat. Behind this figure are millions of people who can communicate, transact, run businesses, access essential services, and participate more fully in the economy.

Speaker #9: Our purpose of transforming lives is not separate from our business strategy. It is fundamental to it. Through our foundations and programs such as Citizens of the Future, we continue to invest in education, health, livelihoods, and opportunities for communities across the country.

Speaker #9: Looking ahead, the Board is confident in the direction of the business and encouraged by the performance achieved during the first half. However, we remain conscious of the challenges and uncertainties in the operating environment.

Speaker #9: For the Board, our priorities are clear. First, we must continue to strengthen our Kenya business, protect our leadership, and improve the experience we offer to our customers.

Speaker #9: Secondly, we must accelerate growth in the broader financial services enterprise technology platforms and Ethiopia. Third, we must maintain financial and operational discipline. Our investments must generate sustainable returns.

Speaker #9: And our actions must protect customer and shareholder trust. The Board will continue to provide oversight, guidance, and support necessary to ensure that management delivers on these priorities.

Speaker #9: In closing, ladies and gentlemen, I would like to thank my fellow board members for their continued commitment, guidance, and support. Thank you. To all our colleagues across Kenya and Ethiopia, thank you for your dedication, for the hard work you do every day to serve our customers.

Speaker #9: Thank you. Safaricom, I also wish to thank our shareholders, customers, the governments of Kenya and Ethiopia, the regulators in both these countries, and the partners for their continued confidence and support.

Speaker #9: We thank you. Safaricom has achieved a great deal over the years. And we have every reason to be proud of what we have built with humility.

Speaker #9: Our responsibility is now to build on that success, not simply protect it. The decisions we make today, the investments we undertake, and the standards we set for ourselves will determine the Safaricom of tomorrow.

Speaker #9: We must therefore remain ambitious, disciplined, and above all, focused on our customers. I'm confident that with the right leadership, continued innovation, and the commitment of our people, Safaricom will continue to grow, create value, and transform lives.

Speaker #9: Thank you very much. I'll ask Caroline to come back and I'll continue.

Speaker #6: Ladies and gentlemen, that brings us now to the end of our half-year '27 results announcement. And wow,

Speaker #9: Come on, let's give the 3 leaders a lot of applause.

Speaker #10: They have delivered so gracefully. Don't you think so? Halftime results, and there you go. Big numbers, big milestones. We are indeed very pleased with these results.

Speaker #10: Before we get into the Q&A session, and I'm checking my Menti platform, I'm seeing very few questions. So I would like us to really engage.

Speaker #10: The code is on the screen. Our code is 81008756. So please submit your questions because that is a segment that we'll be getting into shortly.

Speaker #10: But first, let's turn our attention to the screens to witness the impact of one of our flagship youth empowerment programs that indeed our chairman and our CEO talked about.

Speaker #10: So let's just turn our attention to the screens.

Speaker #6: Fucking told the chance he gave. Dear Kesho.

Speaker #11: Join us by nominating a school that needs an upgrade. Together, let's transform education and create the citizens of the future.

Speaker #10: I think that one deserves a clap. Thank you, thank you, thank you very much. Citizens of the Future, uh, that's a flagship program, uh, indeed that continues to empower our young people across the country.

Speaker #10: It gives them access to quality education, leadership development, and digital skills, and these opportunities helps them to transform and shape future generations. We are indeed very pleased at Safaricom to be making our mark in history.

Speaker #10: Now I want us to spend the next 15 minutes or so taking your questions, and I encourage those in the room to please, you know, engage with us, you know, physically so that you're not basically posting just on the online platform, but feel free to do so, uh, if you're not confident enough to speak up.

Speaker #10: Uh, but for the online audience, I'm still checking my Menti. The code is 81008756. And it will continuously be displayed on the screen even as we continue.

Speaker #10: As I call back my leaders, uh, for the Q&A session, starting with our group CEO Peter Ndegwa, if you could please join us here on stage.

Speaker #10: And then we have our Group Finance and Innovation Officer, Dilip Pal. And then of course the baby, the baby 4 years later whose losses have significantly, uh, declined, and that is our CEO of Safaricom Ethiopia, Wim Vanhelleputte, who I must say today has been accompanied also by our chairman of Safaricom Ethiopia's advisory board, who I'd like to also acknowledge.

Speaker #10: Emias Deshetu, who is in the house with us. So you can see how great this halftime is. So I want to start with the in-room audience.

Speaker #10: Shoot up your hand if you have a quick question for the leaders sitting in front of you. You've now had the results, and I must also confirm they're now loaded on our website so you can easily access them from there.

Speaker #10: Anybody with a quick question, once you get the mic, give us your name, the institution that you represent, and of course then go ahead and make your comment or your question.

Speaker #10: And I see Kepha there. So if you could give a mic to Kepha to start us off. There you go. Thank you. Uh, so mine is not quick, but I'll make it quick.

Speaker #10: It's actually 3 questions. Kepha Muiruri, Nation Media Group.

Speaker #6: I think one point of note from your results is M-Pesa, of course, Kenya. So business and global payments and financial services doing their work.

Speaker #12: There's a 90.3% growth in merchants. This is quite remarkable over a 6-month period. I would like to get more color on how you went about recruiting, you know, the increases, 2.4 to 4.5 million merchants now on the, on, on your service.

Speaker #12: Staying with the same M-Pesa question, which I believe maybe Dilip might also answer the next the second question. I would like to understand the impact inflation has had in perhaps increasing your chargeable transactions.

Speaker #12: What we've seen is some microtransactions because of the changes in the cost of living move a bit higher up, and some might have just breached where your zero-rated transactions sit.

Speaker #12: So I'd like to know that. Then last, and I think I might bring the MD for Ethiopia here. So you're talking of halftime. So depending on the sports you watch, you could go match point.

Speaker #12: To profitability, you could go first and goal depending on the sport also, or it's just added time with the lead intact. So I'd like to, to know price ceiling, how important is price ceiling to continue happening?

Speaker #12: We saw that happen Q4 2025. How important is that to continue happening for you guys to cross over the line? As you identified it as one of the headwinds on Ethiopia business.

Speaker #12: Thank you.

Speaker #10: Thank you, Kepha. I guess we'll start with you, Dilip, on the question on merchants, and then followed by Peter and of course Wim on the Ethiopia question.

Speaker #8: Okay, so I think on merchants, uh, thank you, Kepha, for your questions. Your question, first question was that It looks like you are very happy with, you know, 2.4 going to 5— 4.5 million customers.

Speaker #8: But if you see the split of that, it's the informal merchants, which is the Puchila, Bhyashara, is what has driven the maximum growth, which doubled.

Speaker #8: I mean, 3.2 million from 1.6 million. This business or Pochi merchants did not exist, if I'm not mistaken, say 4 years back. But this is an opportunity that we identified.

Speaker #8: As always, M-Pesa looks for serving unserved or underserved. So we found there is an opportunity to serve those smaller merchants, taking care of their needs.

Speaker #8: And I think that's how you recruit customers. And you— because if you look at the base, base remained with us. It's just not about the recruitment.

Speaker #8: These numbers we are reporting as an active base, which means also some customers drop off. So these numbers is net of those drop off.

Speaker #8: Which means they are truly engaging with us with everything that we have done and ultimately in service of customers. So these are the small merchants, the merchants on the street and on the small markets that you see.

Speaker #8: So that's really the bigger story within the merchants. Now, 5 years back, our Formal merchant base was about 150,000. And now that has crossed a million.

Speaker #8: So I mean, as you always say, M-Pesa is ubiquitous, but ubiquitous in terms of payments. Obviously, if M-Pesa is not available in merchant point, you know, it's really not serving the reasons for why they should take M-Pesa.

Speaker #8: I think you have to look at it like One is the recruitment phase, which is extraordinary, very good. We have, you know, this has been a very good progress over the last 2-3 years.

Speaker #8: We have recruited customers. The second phase which is coming is more important, is the engagement. Because engagement is what will take us to everything that you want to do with the merchants.

Speaker #8: And that's why, you know, you see in my presentation, Peter spoke about in his presentation, presentation I tried to unpack the whole merchant part of it including the business volumes which important the merchant part comes into play.

Speaker #8: It's a very, very important part of our strategy. It's part of our strategy for this year and also for FY13. We're executing our strategy as far as merchant is concerned.

Speaker #8: Coming to— let me also address the second question, which is How do you see the impact of inflation in the M-Pesa transactions? So the way to look at is And you also mentioned about zero-rated transactions.

Speaker #8: So there are 2 numbers you take away. One is, and Peter in his presentation spoke about that, Merchants combining, you know, remember we used to have up to 100 shillings for smaller merchants zero-rated, which you increased to 200.

Speaker #8: And for formal merchants, you increase the limit from 200 to 500. So the combined— these 2 merchants put together, the volume, 81% of the volume is zero-rated.

Speaker #8: That itself speaks about how customers are optimizing because everybody's under pressure. Remember Pochi? In case of Pochi, customers pay. Yeah. Now for P2P, the consumer payments, we call them— I mean, what you see, the consumer payments growing by 14%, but consumer payments is growing 14% on the back of a 63% of transactions being zero-rated or free.

Speaker #8: So you can understand how customers are optimizing. And this is working, I mean, for the customers and also because that enables them also to engage more, do more, because you are expanding our services and that's how it's reflected on the volume and values.

Speaker #8: You have seen the overall volume growing by 25% and values growing by 17%. Peter, I hand over to you for the other one.

Speaker #6: So I think this is for Peter. We may be there just before we— just before we might, uh, just wanted to add a couple of things for to Kepha's question.

Speaker #6: You can always tell Kepha understands our business. He's even telling Wim what to answer and when to answer it. But anyway, uh, on, on merchants I think that was on a lighter note.

Speaker #6: On merchants, it is, as you know, our business has been primarily a consumer business, so serving individuals. But we've been very deliberate in the past few years to actually extend that to serving businesses, yeah, and that's why I talked about both businesses but also even public sector.

Speaker #6: And, and, and the reason why that is important is we used to use merchants, Lipana and Pesa merchants, as to drive payment acceptance, but it was still a consumer proposition.

Speaker #6: You are telling a consumer you can go and pay with M-Pesa in a merchant. But now we are starting to say, how do we support how merchants run their business, whether you are a small merchant, boda boda rider, mama mboga, and so on, or if you're a larger merchant.

Speaker #6: And Dilip is right. PoChi, which is now more than 3 million customers, didn't exist 4 years ago. So it tells you those customers or those businesses are starting to feel that they are being enabled.

Speaker #6: 2 things you'll see going forward in the second half is more services to those merchants, especially credit and other services. Together with our partners.

Speaker #6: And then secondly, tech solutions that enable them run their businesses better. Yeah, so they, they struggle with reconciliations, they struggle with, uh, how do you print invoices, and so on and so forth.

Speaker #6: So making it easier for them also to do their business. And then the third thing that you'll see is that we will also do a lot more converged solutions between our consumer business and our M-Pesa business.

Speaker #6: So you are thinking more holistically about the customer, whether there is an individual customer or a merchant, so that they, they fulfill the needs that they have.

Speaker #6: So you'll see a fire border of Ayam Kulima and all these things that allows us to actually really target, uh, the needs that each customer, customer wants.

Speaker #6: I hand over to him to answer the

Speaker #8: It's your turn. Okay, thank you. Thank you for the question. So just want to explain particularly around the mobile data, the growth that we have seen there.

Speaker #8: It's based on 3 key drivers of growth. We have more users, more usage, and a higher rate. So if you unpack the growth, roughly high level, it's almost like each of those 3 drivers has contributed equally to the growth.

Speaker #8: We've grown our subscriber base 30%— more than 30%. We've also grown the usage from 6 to 7.5, almost 8 gigabytes per user, and the rate has also grown.

Speaker #8: You've seen that over the last 12 months, the rate has increased.

Speaker #12: Now, we are not entirely dependent on the growth of the rates to keep on driving the growth of the overall revenue. Of course, it is an important driver.

Speaker #12: And you know that there is a regulatory directive that has clearly defined in the long term the minimum price that the market needs to evolve to.

Speaker #12: We have been able, through regulatory and industry alignment, be able to rationalize the price. A few months ago. There will be more steps, but how fast and how much will depend on the regulator and how we engage.

Speaker #12: But we know that in the long term, that there is a continuous path to further rationalize the pricing, and that will, of course, also further drive up the revenue.

Speaker #12: But this requires time. There was government changes, the resetting of the government and the engagement. So these things take time. But over time, we know in the long term where we will end up with, because it's clearly defined by the regulator.

Speaker #12: I don't know, Peter, want to add something?

Speaker #6: When the results are good, mics don't work. So, so, Kepha, the only thing I wanted to add to Wim's point, um, I think the growth drivers are clear, but on the regulatory piece, it is— that's why we are saying we have partnered with the regulator and the government.

Speaker #6: To really ensure that we have a sustainable industry. So this is not just for Safaricom, but also for the whole industry, because we need to make investment.

Speaker #6: We are still at an early stage in terms of investment in Ethiopia. We need to continue to make more investment into that country. And for us to do that, we do need pricing that reflects the minimum cost of delivering service.

Speaker #6: That's all we are talking about. And actually, the affordability in Ethiopia— that's why you see very high usage of data— is actually very good.

Speaker #6: Yeah, the price points are very good, but they need to be in line, at least at a minimum, to the cost of delivering that.

Speaker #6: That's, that's the only point I wanted to make. All right, thank you. I'm just scanning the room again for another hand. There's one at the back.

Speaker #10: I see one there. I was looking this side. Okay, let's go back there. Yes. Your name, your institution, and your comment or question.

Speaker #12: Okay, thank you. My name is Alfred Onyango. I'm a financial reporter with the Eastleigh Voice. My question regards the My1 app. The ZD Investment Platform.

Speaker #12: I understand recently you launched the Sharia-compliant MMF. I would just like to get a comment on how is it picking up at the initial steps?

Speaker #12: And moving forward, what maybe are your plans maybe to increase its uptake? Thank you.

Speaker #10: Thank you, thank you. Uh, can I request, uh, Peter, if you could respond to that question? Okay, one more. You can have one more.

Speaker #10: Okay. Another question from the room. Yes, I think I'm being pointed to a hand. Where's the hand? Okay, there's one here in front. Okay.

Speaker #10: Morning. Um, Maureen from BizLife Watch Media. I have 2 questions. Uh, the first one is on M-Pesa transaction, uh, while M-Pesa revenue grew by impressive 13.6% to reach, um, 100.1 billion chargeable transaction volume.

Speaker #10: Surged by a massive 48.2% to 12.9 billion. Um, how are you managing to compress— how are you managing the compression in average revenue per transaction?

Speaker #10: And what is the strategy to deepen monetization as transaction volumes skyrocket? Another one. On dividend payouts, uh, Safaricom shareholder net profit has jumped 35.9% to 58.

Speaker #10: Sorry about that. 58.2 billion, significantly beating analysis, analysis, consensus expectations. Will this blowout performance and strong cash position translate into a higher interim dividend payout for shareholders this year, 2026?

Speaker #10: Thank you. All right, thank you, Maureen, and I think we can pause there to listen to the responses. So maybe we'll start with you, Peter, then Dilip on the interim.

Speaker #10: Yeah, yeah. So the question from Alfred about

Speaker #6: to Shariah, uh, ZD. So, so of course, as you know, ZD is to allow customers to opt in and actually put their money into a money market product.

Speaker #6: instead of leaving it idle, so to say. So it gives the customer more value. So, but we were conscious that we, when we launched Zidi, which as you remember Dilip said already has about $25 billion assets under management, we needed to make sure that we are inclusive in the way that we think about this.

Speaker #6: So one of the reasons why we launched Zidi Shariah is to make sure that we can include our Muslim community because of the rules around what you invest in and what is acceptable from a Sharia standpoint.

Speaker #6: So that's the reason why we launched. We've also ensured that we launch it with a partner that understands that understand that cohort, and it is GAFKAP Investment Bank.

Speaker #6: So far, the asset under management is $230 million. So it's still at an early stage, but what we usually look at at the beginning when a product is launched is the customers who are engaging with the product.

Speaker #6: So this is very positive at 1.5 million. Yeah, within 2 months of launching this thing, we have 1.5 million people already engaging with the product, which means that they believe that it actually meets the objectives of their needs.

Speaker #6: So we are very, very pleased with the initial success and we'll continue to update you. As it progresses.

Speaker #8: So I'll answer your other 2 questions. First is on M-Pesa transactions and monetization. One of the things that you keep us You hear us talking about in every interaction that we have, whether it's half year or full year, is affordability, M-Pesa affordability.

Speaker #8: So you always look for opportunities to make sure that M-Pesa products are affordable. And that's not a surprise when I spoke about these 2 numbers.

Speaker #8: 81% of merchant transactions are zero-rated. 63% of consumer payment transactions volumes are zero-rated. So that speaks to the intention that where you want to go, and that's why you'll see We are building ecosystem where it will be volume-led, the growth will be volume-led.

Speaker #8: To give— to take you back to 2020 when our average chargeable transactions per customer per month was 13, 1-3. And half year this year, you saw the number, we reported 51.

Speaker #8: So you can, you can see that we made our products— first of all, broadened our products. And then we made those products more affordable.

Speaker #8: And that's why you see our take rate, what your question was on average transaction revenue per transactions, what you call that, there is a number that you report, it's a take rate.

Speaker #8: Take rate has been on a decline, and that's very, very much part of our strategy. So we make it affordable, take rate will decline, but the volume growth will take us because it's a platform game, and volume growth will take us to the growth in revenue.

Speaker #8: And that's reflected in the numbers that you have seen. And so it's broadening the services. And increasingly, I think another number to watch out, what I have spoken about, The non-traditional business, what is— which is business payments, global payments, and financial services, the volume growth their year-over-year on this half year is 56%, where you see the traditional ones are actually more or less flattish, very slight growth, which these are not high monetized revenue, but this gives you the scale, this gives you the opportunity to broaden the services that you offer.

Speaker #8: So that's our strategy, to ensure that we make it affordable, and we'll always look for opportunities to make to ensure that, you know, and therefore grow the revenue, so the increase in the volume and the values.

Speaker #8: On dividend, this is— of course, you don't talk about interim dividend in November. So there is a cycle that normally we have followed in the past.

Speaker #8: Uh, we have typically February, March is when we have our opportunity to talk about interim dividend, which of course goes through a board process.

Speaker #8: Having said that, 2 things. One, dividend policy have not changed and have not changed for the longest time. So therefore, we don't expect dividend policy to change, which is to pay out 80% of consolidated net profit.

Speaker #8: Or net profit after tax adjusted with the minority. That's what we pay— we paid out in the past, and there is no reason for me to say that why it should not be the case.

Speaker #8: But we are not here to discuss dividend because dividend is a separate discussion.

Speaker #10: Thank you. Right, and thank you, Dilip, for responding to the dividend question because that is what is actually also being asked online, to the extent of asking when are we actually paying out the interim dividend?

Speaker #10: So we have indeed created an expectation, but there goes your answer. And I'm sure when we are doing it, you'll definitely get to know.

Speaker #10: So allow me to go online. And this is to you, Peter. Just a question around the migration of M-Pesa customers to the OneApp. If you could just speak to what is the status and how that is going.

Speaker #10: I think there is some just some interest in getting to appreciate how that is happening. And I want to thank my online audience. You know, a lot of you giving us congratulatory messages, excellent results, well done.

Speaker #10: And indeed, with the leadership in the room, you know, just well done to all of us for delivering these great results. And as Peter, as you speak to the OneApp, I'll request also that you respond to this question, an interesting one, but happy to read it out.

Speaker #10: You know, when are we going into Somalia?

Speaker #6: Yeah, this— the Somalia question, I think, is a trick one. So, so I'll— I, my training allows me to avoid trick questions. But I think the more logical answer, or actually the more real answer, is let's make sure that the baby that we have on my left side grows up, yeah, and goes to school and returns.

Speaker #6: We normally joke with Wim that he will need to return his milk bottle. So, so once Wim returns that milk bottle, we might consider other destinations.

Speaker #6: So, so that's my answer to the Somalia question. Um, but just going back to the, uh, the question on the 1UP, I remember when we announced our full-year results, we— I came here and I was very clear that we had made a few mistakes.

Speaker #6: We disappointed customers in the way that we launched the app, and we went in and, and we have very good processes when we get something wrong.

Speaker #6: To actually correct it. And frankly, I'm very happy with the work that has been done by the team in correcting. You know, actually, I've said to the team that actually we're in a much better place than if that issue had not arisen, because we sorted out all the issues that the app had.

Speaker #6: We had very— we had— we have very, very good engagement, but also our customer feedback on, on both iOS and Android is above 75%, which tells you that actually we have made the right, the right progress.

Speaker #6: And this is the time now to scale. So as I said in my, my presentation, we already have 7.3 million downloads, which is very significant.

Speaker #6: It's almost like 20%, uh, 7 out of 40 million. It's about 20% of our customer base, which is very good. And then 4.5 million active users.

Speaker #6: On a monthly basis, which is good. Already transacted, uh, 2 trillion shillings. So it tells you that actually the engagement is, is looking good.

Speaker #6: Therefore, we need to migrate customers who are on the old apps, both M-Pesa but also my Safaricom app. M-Pesa app actually has mostly migrated.

Speaker #6: We only have a residual number of about 100,000. And then, so which means that those public customers are probably not receiving the best experience given the enhancements that we have seen on the My1 app.

Speaker #6: So we will allow them to migrate at their own pace, but we'll also encourage them to understand the, uh, what they will get when they do migrate.

Speaker #6: Then the second one is on My Safaricom app, which was very specific. Now there's much more structured migration. We still have about 1.8 million customers.

Speaker #6: Uh, we need to do it in a way that ensures that those customers don't lose anything as they migrate. But certainly all the capabilities that were in the old app are in the One app and much more enhanced.

Speaker #6: We've also resolved a lot of issues that we used to have. With the diaspora, because that was the biggest feedback that we had, uh, people who use, uh, the, the M-Pesa app abroad.

Speaker #6: So we've made, we made real, real progress. So I'm very happy with that. And we'll continue to report on the progress. The final thing before I hand over back to Caroline, I wanted to say on a lighter note, you know, the M-Pesa story.

Speaker #6: One of the things about— beyond the fact that volumes are growing and transactions are growing and so on, and the engagement, uh, people forget that we keep M-Pesa We keep M-Pesa active and secure and safe and usable every day of the week, 365 days a year.

Speaker #6: the reasons is because of how we invest in the, in the platforms. I talked about FinTech 2.0. Just around COVID, we used to have about transactions per second of 1,500.

Speaker #6: Today we've crossed the 6,000 transactions per second, and this platform can go to double that, which is 12,000. So it tells you that you need to match the growth that we are seeing on the customer side, on the investment, and still make it safe and secure and actually always available, which is the other piece that some of the technology people are not usually recognized, but they are also the heroes of why M-Pesa is so successful, not just commercial side but also the technology side of the business.

Speaker #10: Thank you. Thank you very much, Peter. And now turning to you, Dilip, and Wim, I have questions for you. So to Dilip, on total funding, the observation, of course, is that we have increased funding in Ethiopia for these past 6 months, with debt-to-equity ratio raising to 20%.

Speaker #10: So how much additional funding will Ethiopia require before becoming self-financing, and in what proportion? So if you could give us some color around funding.

Speaker #10: And then to you, Wim, lots of excitement with Ethiopia reducing their losses significantly. So there's a question here around, you know, what are some of the things that have taken place to be able to bring about this great outcome?

Speaker #10: And as you do that, if you could just also tell us how you feel personally and strategically in terms of us approaching approaching, you know, the path to profitability in Ethiopia?

Speaker #8: So we'll start with you, Dilip, and then we'll come to Wim. Okay, so that will be more inspirational. Let me, let me deal with the most probably the So on funding, If you recall what we said before, a couple of things I want to remind all of you.

Speaker #8: We said that we have defined an investment period and we defined our CapEx that you will spend within that investment period. And when those investment periods broadly done, then we defined what we call the scale business for Ethiopia.

Speaker #8: And Peter in his presentation spoke about that scale, which is 15 to 20 million customers, close to 4,000 sites. This does not mean that Ethiopia will not grow the sites, but in telecom operations you need to have a kind of a scale before you say, okay, where am I going next?

Speaker #8: So our CapEx needs Beyond a scale business will always be there. You saw we invested in Kenya in the first half of the year, 35 billion Kenya shillings.

Speaker #8: It's not a small amount, which means that one could argue at this stage of business, why are you— because you still need to invest CapEx.

Speaker #8: Same will happen for Ethiopia as well. So from a funding perspective, what you mentioned before is that from a scale business, what you wanted to go, that the large funding requirement, that part is now behind us.

Speaker #8: And then depending on how we expand beyond what we have, then you will need— you asked me the color of funding. I think it's difficult to now give you because you now have a plan.

Speaker #8: We'll see how much you can grow the business. get our next set of sites to also remain competitive in the market. I think that will determine what the funding requirement would be.

Speaker #8: But I think the other shift that you have seen, that it used to be 100% equity and now no business is sustainable that way.

Speaker #8: You need debt in the balance sheet and that's how you see the debt-to-equity ratios also now coming to 20%, which is a very, very deliberate strategy for us to ensure that Ethiopia is able to borrow money on the strength of its balance sheet.

Speaker #8: And I think that's what is more and more is happening. So I think I will leave you— leave with that. At this point in time because.

Speaker #8: of what we have spoken about, the need, CapEx need, and the big funding requirement for the business, we are mostly done.

Speaker #10: Okay.

Speaker #12: What have we done? Well, I'm sure there are many finance people in the room, so I'll not explain you what EBITDA means, but EBITDA is revenue

Speaker #8: minus the cost of operations minus the cost of sales. So you need to work on all 3 levers at the same time to get to EBITDA positive or to drastically improve your EBITDA.

Speaker #12: The revenue you have seen, we've more than doubled over the last 1 year. Users, usage, and rate management, those 3 have contributed to drive up the revenue.

Speaker #12: But at the same time, very strong, I would say, execution discipline to keep the cost structure under control. We have now a cost of sales that is above 60%.

Speaker #12: 40% cost of sales, margin 60%, and the cost of operations has also been very well managed. We have insourced a lot of things. We have been able to reduce our dependency on FX.

Speaker #12: So localization of the cost and insourcing of the cost, which has really helped to keep the cost of doing business, the cost of operation under control.

Speaker #12: So you drive up your revenue and you have the discipline of the cost control. That's how we've delivered the EBITDA positive. Almost positive. Dilip, short by 400 million, but the part of the EBITDA improvement is because of those 3.

Speaker #12: What does that mean strategically? I think, Dilip, you, you've mentioned it. Strategically, it means that any any funding, whoever, wherever it comes from. It's not about shareholder or equity.

Speaker #12: It can be bank loans. It can be other forms of funding. Now, 100% of whatever funding you can get into the business, go straight to assets.

Speaker #12: You can show for your assets for every funding that you have been able to recover. The challenge I had with Peter for the last 3 years He tells me, we've sent you $100 million and you only have $80 million asset to show for it.

Speaker #12: Where's the remaining $20 million? The remaining $20 million has evaporated because you have startup costs with EBITDA negative. So part of your funding actually does not go to building assets, has to go to build— to run the operation.

Speaker #12: So that is a very strategically, not just symbolically, but a very important financially— financial milestone that you pass because 100% of funding can go now to building assets.

Speaker #12: What it means for me personally, I would say we are proud, extremely proud of the team that has achieved this. Some of the team are actually here in the room.

Speaker #12: We have the founding fathers and mothers of the Kenya team who came in the early days to build the foundations, very proud, and we share all the success that we have had.

Speaker #12: And of course, the team in Ethiopia have done an amazing job. We are now about 900 people, also largely localized. HR. So I think the overwhelming feeling is about being proud of what we have achieved, but we are just getting started.

Speaker #12: We still have 57% EBITDA as the target. So we are now almost at zero. So we still have a very long way to go to catch up and come close to

Speaker #8: where the Kenya business has been and is and continues to grow. So still a very long way to go, Caroline, very long journey to go.

Speaker #8: Thank you, thank you, Wim. Thank you, Dilip. And indeed, to Wim, this

Speaker #10: targets will be now very stretched. You have proved potentially that you can do this, so expect that to come along. So I think that brings us to almost a close of this session, and I would like to just position the last question to our group CEO.

Speaker #10: Very futuristic, great question here online. And to you, Peter, the question is, what does success look like, not just commercially, for the Safaricom focus for the future?

Speaker #10: To be Africa's leading purpose-led telco company by 2030? Peter.

Speaker #6: Yeah, when I'm asked difficult questions, I, I can blame the mic, but this one I can't. So So first of all, I think it is really great to acknowledge what we have been able to do by going into a country like Ethiopia.

Speaker #6: We got those— we got the license, as you know, during COVID. So it was a time where everyone was not taking risks. We actually, through the support of the board, actually made the decision to go in.

Speaker #6: It's probably one of the best decisions. I know it's been criticized here and there, you know, when are you going to make profits and so on.

Speaker #6: But fantastic driver of our future. So I— that's where I would start from, that we are starting to secure, uh, investments that we have made that will allow us to see our way to real growth into the future.

Speaker #6: And then as we think about 2030 being a purpose-led technology company, our business should always be about purpose. So when this video ran, the one on schools, one of our most proud investments that we have made is actually that citizens of the future where we are building more than 100 schools every year, training teachers on digital skills, really also driving a whole sponsorship program for both the high school but also TVET.

Speaker #6: That I said to my team, that we invest 5x more in community than we invest in our brand. And sometimes, because you have to remain a little humble, you don't talk about it as much.

Speaker #6: And in a way, that's one of the reasons why we've gone for the program where we are asking creatives to tell the stories from the recipient's perspective.

Speaker #6: And you'll have seen this running in the media. So purpose, and that's why it says to be Africa's leading purpose-led technology company, not necessarily the largest business, but one that shapes the way we actually really work with society and we confront issues even when they are difficult.

Speaker #6: When people ask me, so are you involved in public sector work, I say those are our customers who are receiving government services. So if we don't get involved, which other organization is going to do it?

Speaker #6: And actually, are you expecting foreigners to come in and do it? So for me, it's about continuing to use technology and innovation to solve challenges that affect society and customers, continue to build a business that, that is future-ready and one that can continue to deliver objectives for shareholders while still impacting customers in a fundamental way.

Speaker #6: And of course, leverage technology. We've seen how we are starting to use AI. And AI is no longer theoretical. We have a program we call PACE, an AI evangelist program that our employees are going to be AI ready.

Speaker #6: Even when you don't have training in IT or those kind of skills. So making sure that people can feel that I have a role to play in the future.

Speaker #6: I know it's kind of in a different way from what probably someone expected. I didn't, I didn't mention any numbers, and that the intention, which is the impact we'll create, is what will allow us to know whether we have delivered Africa's leading purpose-led technology company.

Speaker #10: Thank you. Come on, let's give him a lot of applause. Thank you very much, Peter, Dilip, and Wim. And that brings us to the end of our results announcement engagement this morning.

Speaker #10: Thank you for being a great audience in-house and indeed keeping engaged on the online platform. We are really, really grateful that you've engaged with us through the Q&A.

Speaker #10: And this just to state that it's the beginning. Now that you've seen the results, which are already loaded on our website, beginning of this engagement.

Speaker #10: There'll be many more platforms to engage, so the many remaining questions will be able to be addressed in those various forums. Us here from Safaricom is to wish you a great day.

Speaker #10: And indeed, let us keep connected and keep well, even as we wish you the very best for the remaining part of your day. Thank you, thank you, and thank you very much.

Speaker #9: The future isn't something we wait for, and at Safaricom, every action has the power to transform millions of lives. Some ideas change everything. Others push us into places we've never been before.

Speaker #11: Because progress doesn't happen in silos, it moves across teams. Safaricom isn't a ladder, it's a launchpad to grow.

Speaker #8: Unlimited. Safaricom.

Speaker #11: Come as you are.

Speaker #8: And rise.

Speaker #11: For together, we transform lives every day. We are Safaricom, a force for good, creating what's next.

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