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1. Company Snapshot

1.a. Company Description

Airtel Africa Plc, together with its subsidiaries, provides telecommunications and mobile money services to customers in Nigeria, East Africa, and Francophone Africa.It offers prepaid and postpaid wireless voice, international roaming, and fixed line telephone services; data communication services, including 2G, 3G, and 4G; and mobile money services, such as digital wallet payments systems, microloans, savings, and international money transfers.The company also provides messaging, value added, enterprise, and infrastructure sharing services, as well as support services; and sells handsets.


In addition, it is involved in the investment activities.The company was incorporated in 2018 and is based in London, the United Kingdom.Airtel Africa Plc is a subsidiary of Airtel Africa Mauritius Limited.

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1.b. Last Insights on AAF

Airtel Africa's recent prospects are buoyed by analyst optimism, with the average price target rising from £2.40 to £2.80 per share. The company's estimated fair value is UK£5.81, based on 2 Stage Free Cash Flow to Equity. Analysts have upgraded their views, citing improved fundamentals and growth prospects. The stock is considered undervalued, trading at a 46% discount. Recent market challenges, including weak trade data from China, have impacted the UK stock market, but Airtel Africa's intrinsic value remains attractive.

1.c. Company Highlights

2. Airtel Africa's Strong H1 Performance Driven by Revenue Growth and Margin Expansion

Airtel Africa's financial performance for the first half of the year was robust, with revenues reaching almost $3 billion, representing a 25.8% growth in reported currency and 24.5% in constant currency. EBITDA margin expanded to 48.5%, up 268 basis points in reported currency, driven by operating momentum and cost efficiency measures. Earnings per share (EPS) before exceptional items was up 70% to $0.083. The company's reported EPS came in at $0.03645, beating analyst estimates of $0.02232.

Publication Date: Oct -30

📋 Highlights
  • Revenue Growth: 24.5% constant currency revenue increase driven by operational and financial performance improvements.
  • EBITDA Margin Expansion: EBITDA margin rose to 48.5% (up 258 bps), with Q2 reaching 49% (up from 46.4% prior period).
  • Dividend Growth: 9.2% increase in interim dividend to $0.0284 per share, reflecting strong free cash flow generation.
  • CapEx Guidance: Capital expenditure raised to $875M–$900M (from $725M–$750M) to support network expansion and data demand.
  • Nigeria Performance: Customer base grew 10%, with ARPU rising nearly 40% in constant currency, reflecting operational momentum.

Operational Highlights

The strong performance was driven by a consistent deployment of the company's strategy, with revenue growth and cost efficiency measures contributing to a further uptick in EBITDA margins. The company's mobile money revenue grew 30% on a year-on-year basis, while data revenue was up 37%. The performance in Nigeria was particularly strong, with customers increasing around 10% and ARPU growing almost 40% in constant currency.

Valuation and Outlook

With a P/E Ratio of 39.05 and an EV/EBITDA of 7.74, the market is pricing in a certain level of growth. Analysts estimate next year's revenue growth at 14.6%. The company's dividend yield stands at 1.63%, while the free cash flow yield is 12.47%. The return on equity (ROE) is 14.31%, indicating a relatively healthy profitability profile. As the company continues to invest in its network and expand its services, the stable macroeconomic environment and strong operating momentum are expected to drive further growth.

Capital Structure and Investment Plans

The company's capital structure remains attractive, with lease-adjusted leverage down to 0.8x and 95% of debt in local currency. The company is investing heavily in its network, with a focus on driving data capacity and coverage. The recent increase in CapEx guidance to $875 million to $900 million for the current year is expected to support the company's growth plans. As Sunil Taldar noted, the company has a strong framework for determining capital allocation and CapEx investments, which guides its decisions.

3. NewsRoom

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.70%)

6. Segments

Nigeria Mobile Services

Expected Growth: 12.3%

Increasing mobile penetration, growing demand for data services, and expansion of 4G networks are expected to drive Airtel Nigeria's growth. The Nigerian government's efforts to improve digital infrastructure and promote mobile financial services will also contribute to the growth.

East Africa Mobile Services

Expected Growth: 10.3%

Increasing mobile penetration, growing demand for data services, and expansion of 4G networks in Kenya, Tanzania, Uganda, and Rwanda drive growth in East Africa mobile services market.

Francophone Africa Mobile Services

Expected Growth: 7.3%

Growing demand for mobile data and digital services, increasing smartphone penetration, and expansion of 4G networks in Francophone Africa drive the growth of Airtel Africa Plc's mobile services in the region.

Mobile Money

Expected Growth: 12.3%

Increasing mobile penetration, growing demand for digital payments, and expansion into new markets drive Airtel Africa's Mobile Money growth. The service's convenience, security, and accessibility also contribute to its adoption.

Unallocated

Expected Growth: 10.2%

Airtel Africa's unallocated shares, held by the parent company, are expected to drive growth, driven by increasing demand for mobile services, expansion into new markets, and investments in 4G network infrastructure.

7. Detailed Products

Mobile Voice

Airtel Africa's mobile voice service allows customers to make and receive voice calls across the continent.

Mobile Data

Airtel Africa's mobile data service provides customers with fast and reliable internet access on their mobile devices.

Mobile Money

Airtel Africa's mobile money service enables customers to store and manage their money digitally, making transactions convenient and secure.

Enterprise Solutions

Airtel Africa's enterprise solutions provide businesses with customized communication and connectivity solutions to enhance their operations.

Fixed Broadband

Airtel Africa's fixed broadband service provides customers with high-speed internet access in their homes and offices.

Digital TV

Airtel Africa's digital TV service offers customers a range of channels and on-demand content, providing an immersive entertainment experience.

Airtel Business

Airtel Africa's business solutions provide customized communication and connectivity solutions for small, medium, and large enterprises.

8. Airtel Africa Plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Airtel Africa Plc faces moderate threat from substitutes, as customers have limited alternatives for mobile network services. However, the presence of other mobile network operators and internet service providers poses some threat.

Bargaining Power Of Customers

Airtel Africa Plc's customers have low bargaining power due to the lack of alternative mobile network services and the company's strong brand presence in the market.

Bargaining Power Of Suppliers

Airtel Africa Plc's suppliers, such as network equipment providers, have moderate bargaining power due to the presence of multiple suppliers in the market.

Threat Of New Entrants

The threat of new entrants is low for Airtel Africa Plc, as entering the mobile network services market requires significant capital investment and regulatory approvals.

Intensity Of Rivalry

The intensity of rivalry is high in the mobile network services market, with multiple players competing for market share and customers.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 65.52%
Debt Cost 3.95%
Equity Weight 34.48%
Equity Cost 7.55%
WACC 5.19%
Leverage 190.05%

11. Quality Control: Airtel Africa Plc passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Telia Company

A-Score: 6.2/10

Value: 4.4

Growth: 2.6

Quality: 4.0

Yield: 9.4

Momentum: 7.5

Volatility: 9.3

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Itissalat Al-Maghrib

A-Score: 6.2/10

Value: 3.6

Growth: 2.3

Quality: 6.9

Yield: 6.2

Momentum: 9.5

Volatility: 8.3

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United Internet

A-Score: 5.6/10

Value: 5.9

Growth: 4.4

Quality: 3.0

Yield: 6.9

Momentum: 9.0

Volatility: 4.7

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Airtel Africa

A-Score: 5.4/10

Value: 3.9

Growth: 4.9

Quality: 5.2

Yield: 4.4

Momentum: 10.0

Volatility: 4.3

1-Year Total Return ->

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Elisa

A-Score: 5.0/10

Value: 3.9

Growth: 4.0

Quality: 6.6

Yield: 8.1

Momentum: 2.5

Volatility: 4.7

1-Year Total Return ->

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1&1

A-Score: 4.4/10

Value: 6.5

Growth: 3.3

Quality: 4.1

Yield: 0.0

Momentum: 9.5

Volatility: 3.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

3.09$

Current Price

3.09$

Potential

-0.00%

Expected Cash-Flows