Airtel Africa plc Annual Report and Accounts 2021 Transforming lives Strategic report Transforming lives by bridging the digital divide Strategic report Governance report Financial statements 1 Airtel Africa overview 82 Our Board of directors 140 Independent auditors’ report 8 Chair’s statement 86 Our Executive Committee 150 Consolidated statement 10 Chief executive officer’s review 88 Chair’s introduction of comprehensive income 13 Our investment proposition 90 Our leadership 151 Consolidated statement 14 Our key performance indicators 97 Board evaluation of financial position 16 Covid-19 statement 100 Audit and Risk Committee report 152 Consolidated statement of changes in equity 18 Our market environment 110 Nominations Committee report 153 Consolidated statement 20 Legislation and regulation 115 Our compliance with the UK of cash flows 22 Our business model Corporate Governance Code 154 Notes to consolidated 119 Directors’ report 24 Our strategy financial statements 123 Directors’ responsibilities statement 32 Our stakeholders 210 Company statement 38 Business reviews 124 Directors’ remuneration report of financial position 38 – Nigeria 211 Company statements 40 – East Africa of changes in equity 42 – Francophone Africa 212 Notes to company only 44 – Mobile services financial statements 46 – Airtel Money 48 Airtel Business Other information 49 Digital Labs 214 Forward-looking statements 50 Our sustainability ambition 215 Glossary 54 Corporate responsibility 218 General shareholders’ 60 Chief financial officer’s introduction information to the financial review 62 Financial review 67 Alternative performance measures 72 Managing our risk 79 Our long-term viability statement © 2021 Friend Studio Ltd File name: Overview_v42 Modification Date: 25 May 2021 4:45 pm Strategic report Our business is transforming lives across Africa by bringing telecoms and mobile money services to almost 118.2 million customers in 14 sub- Saharan countries. We’re connecting the unconnected, reaching the financially excluded and bridging the digital divide. And our essential services are unlocking the potential for people and economies to grow. Niger Chad Nigeria Uganda Rwanda Kenya Gabon Democratic Republic of the Congo Republic Tanzania of the Congo The Seychelles Zambia Malawi Our regions Madagascar Nigeria East Africa Francophone Africa Airtel Africa plc Annual Report and Accounts 2021 1 © 2021 Friend Studio Ltd File name: Overview_v42 Modification Date: 25 May 2021 4:45 pm Strategic report Providing essential services, supporting livelihoods 2 Airtel Africa plc Annual Report and Accounts 2021 © 2021 Friend Studio Ltd File name: Overview_v42 Modification Date: 25 May 2021 4:45 pm Strategic report Telecoms and mobile money services are vital in Africa, where too many people and communities are held back by large distances and underdeveloped infrastructure. As the Covid-19 emergency has shown, a resilient telecoms network is crucial to people’s lives and livelihoods. 40.6m 1.8m+ 300 133m data customers people financially schools in school age children empowered 30 counties in in sub-Saharan through direct Kenya have been Africa had access employment, connected to remote learning business partnerships and our distribution network Airtel Africa plc Annual Report and Accounts 2021 3 © 2021 Friend Studio Ltd File name: Overview_v42 Modification Date: 25 May 2021 4:45 pm Strategic report Serving customers and creating opportunities 4 Airtel Africa plc Annual Report and Accounts 2021 © 2021 Friend Studio Ltd File name: Overview_v42 Modification Date: 25 May 2021 4:45 pm Strategic report By serving our customers, we connect them to each other, and to future opportunities. By expanding our network in both rural and semi-urban areas, we’re reaching more customers than ever. And by taking the lead in the rollout of 4G networks in all our markets, we’re helping to drive digitalisation. But while we’re among the leaders in all our markets, we know there’s more for us to do. Mobile and digital penetration in Africa is still low. Populations are young, and growing fast. Millions of people are still unbanked or financially excluded. Millions have yet to join the digital economy. Voice Data Airtel Money We offer pre- and post- We offer a suite of data We offer mobile money paid wireless voice communications services, services, including services, international including 2G, 3G and 4G. payment services, roaming and fixed-line We provide 4G services microloans, savings telephone services in all 14 of our markets and international money transfers Airtel Africa plc Annual Report and Accounts 2021 5 © 2021 Friend Studio Ltd File name: Overview_v42 Modification Date: 25 May 2021 4:45 pm Strategic report Building sustainable value, for all our stakeholders 6 Airtel Africa plc Annual Report and Accounts 2021 © 2021 Friend Studio Ltd File name: Overview_v42 Modification Date: 25 May 2021 4:45 pm Strategic report We’re continuing to strengthen our networks and expand our distribution channels so we can reach more customers, with more services. Growing our business sustainably means growing our impact: meeting the critical needs of customers, economies, and all our stakeholders. 25,368 >1.8m 76.5% 54,500+ 2020: 22,909 2020: >1.6m 2020: 64.7% 2020: 43,000+ infrastructure retail touchpoints sites providing kilometers of sites (agents and 4G coverage connecting fibre distributors) in our network Airtel Africa plc Annual Report and Accounts 2021 7 © 2021 Friend Studio Ltd File name: Overview_v42 Modification Date: 25 May 2021 4:45 pm Strategic report Chair’s statement Empowering customers and communities in difficult times It is clear that just as data and telecoms services have been essential to people and economies during the pandemic, they will also play a vital role in the recovery across sub-Saharan Africa. By consistently focusing on serving our customers, we transform lives and communities while delivering sustainable, profitable growth. Sunil Bharti Mittal Chair 8 Airtel Africa plc Annual Report and Accounts 2021 © 2021 Friend Studio Ltd File name: ChairmansXstatement_v32 Modification Date: 25 May 2021 4:47 pm Strategic report In March 2021, we took an important step by welcoming both Many of our customers and The Rise Fund and Mastercard as investors in our mobile money business. The Rise Fund will invest $200m and Mastercard will invest $100m in Airtel their communities faced Mobile Commerce BV (AMC BV), a wholly-owned subsidiary of Airtel Africa plc. This is part of our pursuit of asset monetisation opportunities, and we difficult and tragic times aim to explore the potential listing of the mobile money business within four years. At the same time, we welcome The Rise Fund and Mastercard as over the last year. partners in our ambition of banking the unbanked across Africa. This investment is described on page 47. The Covid-19 pandemic has had a deep impact on people’s lives and livelihoods across Africa, as it has everywhere in the world. This crisis Meeting the Board’s priorities is not over, though there are promising signs in terms of treatment Strong governance remains a core focus of the Board. We were pleased to and vaccination, and the World Bank and other experts predict a welcome Kelly Bayer Rosmarin as a non-executive director when Arthur return to GDP growth in Africa in 2021. It is clear that just as data Lang stepped down in October 2020 – both are nominees of Singtel. and telecoms services have been essential to people and economies during the pandemic, they will play a vital role in the recovery across We announced on 29 April 2021 that Olusegun (Segun) Ogunsanya, sub-Saharan Africa. managing director and chief executive officer of Airtel Nigeria, is to succeed Raghunath (Raghu) Mandava as managing director and chief I know that everyone at Airtel Africa is rightly proud of the work we executive officer of Airtel Africa plc following Raghu’s informing of the have done to maintain our services over the last year, and to keep Board of his intention to retire. Segun will join the Board of Airtel Africa serving our customers throughout the crisis. For millions of people plc with effect from 1 October 2021. across the continent, our services have been a vital link – to family and loved ones, to their businesses and livelihoods, and to the On behalf of the Board I would like to thank Raghu for being wider economy. instrumental in successfully leading and transforming Airtel Africa into a powerhouse telecoms and mobile money company. Throughout that It has been a year in which Airtel Africa employees have been true to time, Raghu has worked tirelessly, first to repair and then to strengthen our core value, ‘Respectful’: ‘We live the same lives as our customers, Airtel Africa’s business, and to champion our stakeholders. As we look sharing the same joys and the same pains’. And as we support the forward to Segun assuming his new role in October 2021, we do so recovery and open up opportunities through financial inclusion and from a position of great strength as a result of Raghu’s highly effective digital empowerment, we will continue to serve our purpose of stewardship. Raghu will retire from the Board with our very best wishes transforming lives. and sincere appreciation for everything he has achieved. We also announced on the same day that Jaideep Paul, chief financial A resilient business, focused officer, has been appointed as an Executive director and will join the on colleagues and customers Board of Airtel Africa plc with effect from 1 June 2021. The company is committed to ensuring that the Board membership Throughout the year, the Board has been confident that the business continues to reflect the diversity, breadth of skills and experience has had the right measures in place to protect our colleagues, who required to drive and support the business strategy going forward. have adapted to new ways of working so that we could continue to provide vital services and create value for all our stakeholders.