TOWARDS BECOMING the NEXT GENERATION DIGITAL CHAMPION Axiata Group Berhad Integrated Annual Report 2020 43 Our Value Creation Model
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Bringing online education and accelerating learning for more than 1.5 million students in Bangladesh. #ItBeginsWithUs Robi Axiata 10-Minute School TOWARDS BECOMING THE NEXT GENERATION DIGITAL CHAMPION Axiata Group Berhad Integrated Annual Report 2020 43 Our Value Creation Model Unfold To See How We Create Value Axiata utilises input from our six capitals to drive through our strategies in our value creation process. UN SDGs. As a result of the nature of the trade-offs and interconnectivity of our six capitals, Axiata’s Our efforts lead to output, as well as outcomes and value created in the short, medium and long value creation reporting focuses on the key activities that lead to the outcomes aligned with achieving term for our base of stakeholders. The Group’s efforts are also contributing to advancing some of the our ambition of becoming The Next Generation Digital Champion by 2024. Our Six Capitals Social & Financial Human Intellectual Manufactured Natural Relationship Capital Capital Capital Capital Capital Capital Capital providers Our skilled workforce Our strong brand Continuous and Our network We consume energy supply us with the is a pivotal part of equity and trust, ongoing close infrastructures, data in our operations, necessary funding Axiata’s business culture, partnerships, engagements centres and software and use land to house for our business, model. Our engaged, know-how as well as with customers, applications are an our towers and other in addition to cash diverse, and our procedures and communities, important source infrastructure. generated from innovation driven processes differentiate governments and of competitive operations and employees contribute us in the marketplace. regulators, suppliers, differentiation. Our investment. to the success of our trade unions and Manufactured Capital business. industry bodies, also includes the office among others, are buildings housing our key towards ensuring workforce. we maintain strong relationships of trust with our stakeholders. Axiata Group Berhad Integrated Annual Report 2020 43 Our Value Creation Model Financial Human Intellectual Social & Relationship Manufactured Natural • Market capitalisation of • More than 12,6001 • Mobile licenses and • 2020 Brand Power Results: • 22,329 towers owned by • Direct energy consumption RM34.3 billion as at end employees from 42 spectrum allocations - #1 in Malaysia2 and edotco of 1.5 million GJ 2020 nationalities across Asia throughout our operating Sri Lanka • 11,258 towers managed by • Indirect energy 3 • Gross debt/EBITDA ratio • Male : Female employee markets - #2 in Bangaldesh , edotco consumption of 7.0 million ratio of 69 : 31 • Investment in digitisation Indonesia4, Cambodia and • Group-wide BTS GJ of 2.6x • RM190 million spent on and modernisation Nepal infrastructure5 • Renewable energy capacity • Debt Equity Ratio of 1.6x talent development since initiatives • Industry and community • Group capex of RM5.3 of Total GHG emissions of • Credit ratings of Baa2 on 2009 • Data privacy, cyber security partnerships billion 1.38 million tCO2e Moody’s and BBB+ on • High percentage of and information security • Customer base of • Group Plant, Property and • Energy intensity of S&P engaged employees initiatives approximately 157 million Equipment (PPE) value of 558.8 GJ per million GB • Operating expenses of subscribers RM24.5 billion (Digital Telco only) RM13.5 billion • Telecommunication network • Capital expenditure of equipment (net book value) RM5.3 billion of RM20.6 billion • edotco tower capex of RM510.2 million • edotco PPE value of RM2.43 THE INPUT OUR CAPITALS PROVIDE THE INPUT OUR CAPITALS billion • Apigate, our global digital monetisation and customer growth solution provider OUR ASPIRATIONS AXIATA 5.0 STRATEGIC INITIATIVES: Planet & Society THREE CORE PILLARS AND 10 KEY FOCUS AREAS To be recognised as a responsible Digital Champion DIGITAL TELCOS Our Purpose in creating a Digitally Inclusive Society 1 Positioning for New Norms Advancing Asia Transform from Mobile-Centric Telco 2 OpCos Transformation Performance to Converged Digital Operator Target: #1 / Strong #2 in All Our Markets To be one of Asia’s largest telecoms and tech 3 New Growth Areas groups in all financial metrics as we grow in market capitalisation and generate strong Return on 4 Our Vision Cost Management Invested Capital DIGITAL BUSINESSES The Next 5 New Engagement Model Generation Digital People Pivot from Portfolio Company to Champion Two Lines of Digital Businesses by 2024 6 Digitisation & Analytics To be recognised as a Top Talent Brand and an Target: Create 2 “Unicorns” Asian Talent Factory 7 Stakeholder Management Partnership Our Values INFRASTRUCTURE 8 Organisation 5.0 Uncompromising To be the number one choice for customers and Advance from Regional Champion 9 Integrity, partners by offering superior customer experience Industry Consolidation STRUCTURES IN PLACE FOR VALUE CREATION VALUE FOR IN PLACE STRUCTURES to Global Champion Exceptional while continuing to build trust with all our Target: Top 5 in the World Performance stakeholders 10 Portfolio Optimisation & Value Illumination Adverse Differentiated Comprehensive Data-driven Secure digital Reliable Sustainable End-to-end Output Seamless digital Enterprise Fibre tower connectivity connection digital financial solutions/IoT network connectivity network services platforms for advertising services availability tower management By-products: businesses solutions services GHG emissions OUR OUTPUTS OUR OUTPUTS AS A BUSINESS AS 1. Delivering Long-Term 2. Building a Modern, 3. Becoming a Trusted 4. Supporting 5. Enabling Digitally- 6. Minimising Value to Shareholders Agile and Digital Asian and Reliable Digital Governments and Connected Societies Environmental Impact Talent Factory Partner Communities in Our Markets • Maximise shareholder • Talent development • Provide excellent • Contribute to the • Increase population • Focused carbon reduction value platform geared towards customer experience socioeconomic coverage and connect strategy • Sustained long-term being a Modern, Agile across our footprint development of the underserved areas • Optimise energy business growth and and Digital (M.A.D.) Asian • Establish strong brand countries we operate • Aid digital and financial consumption through profitability Talent Factory equity and trust in through national inclusion design innovations and • Attract and retain talented • Digital platforms to cater contributions and social renewable energy sources employees to customer needs for responsibility initiatives • Diverse workforce, with innovative digital products multiple opportunities to and services advance their careers UN SDG: UN SDG: UN SDG: UN SDG: UN SDG: UN SDG: OUTCOMES WHICH BENEFIT ALL BENEFIT WHICH OUTCOMES IAR Refer to page 44 IAR Refer to page 45 IAR Refer to page 46 IAR Refer to page 47 IAR Refer to page 48 IAR Refer to page 49 for more details for more details for more details for more details for more details for more details • In the short term, expanding and modernising our networks will increase our base of • Our Social & Relationship Capital investments reduces our Financial Capital in the short term. Manufactured Capital, but reduce our Financial Capital. However in the long term, these However in the long term, our efforts to bridge the digital divide and foster regional socioeconomic investments expand our business’ capacities, and therefore grow our Financial Capital development augments the value of our Social & Relationship, Human, Intellectual and Financial • Investments in Intellectual Capital reduces our Financial Capital in the short term. However in Capitals the long term, it leads to increasing the value of our Human, Financial, and Social & Relationship • Our Manufactured Capital base negatively impacts upon our Natural Capital. However, through Capital concerted efforts to reduce our carbon footprint, we are able to mitigate our business impact TRADE-OFFS on our Natural Capital Notes: 1 Includes edotco Group and Axiata Digital employees IAR For more details on: 2 Includes Xpax - OpCos’ BTS numbers, please refer to pages 61 to 71 in the “Delivering Our Strategy” section 3 Includes Airtel - The 10 Key Focus Areas, please refer to page 39 in the “Realising Our Vision” section 4 Includes Axis 5 As at 31 December 2020 Axiata Group Berhad Integrated Annual Report 2020 44 Related Key Capitals: Link to 4P Goals: 1. Delivering Long-Term Value To Shareholders Financial, Social & Relationship Performance Outcomes And Value Created Activities and Processes to Create Value Optimisation of spectrum for 4G demand, data • Ensured optimum cost and interest savings uptake from the accelerated depreciation and • Strengthened liquidity position Maximise shareholder In a challenging environment, focused on margin write-off of 3G assets amounting to RM1.1 billion, Successfully listed Robi on the Dhaka Stock value by maintaining improvement to generate cash in line with the resulting in PATAMI impact of RM604.3 million Exchange Limited and the Chittagong Stock sustainable dividend Group’s shift to becoming a High Dividend Accelerated digital adoption in OpCos due to Exchange Limited in Bangladesh on 24 December payout Company COVID-19 new norms 2020 Sustain long-term Focused on conserving cash via disciplined cost Dual-tranche offering in August 2020, comprising Given the uncertainty surrounding the depth business growth and management and capex efficiency, whilst building the 10-year USD500 million Sukuk and 30- and duration of