SHAREHOLDERS

Our shareholders expect us to remain a high-performing company that balances delivering consistent and sustainable financial returns against ethical and environmentally responsible operations.

As a reflection of this, they expect us to retain a stable, experienced and proven management team and to uphold the very highest standards of corporate governance and practices.

Our shareholding structure changed during the year and is currently comprised of the Government of Kenya (35 per cent), Vodacom (35 per cent), Vodafone (5 per cent) and free float (25 per cent).

* Company holds an indirect interest in Safaricom through a wholly-owned subsidiary, Vodafone Kenya Ltd (VKL).

The preceding table shows that 96% of our shareholders hold a maximum of 10,000 shares and are mostly comprised of the local individuals.

In August 2017, Vodafone transferred 35 per cent of its stake in Safaricom to South Africa-based Vodacom. Vodafone is consolidating its African assets under its subsidiary, Vodacom, to reduce costs and to provide the parent company with a streamlined, single-entry point into sub-Saharan Africa. The deal also diversifies the earnings of Vodacom and reduces its reliance on the South African market, which has a 146 per cent mobile penetration rate.

The Safaricom share price rose 1.2 per cent at the announcement of the deal, which is considered a vote of confidence in the Safaricom management team and our plans to expand our M-PESA platform to other African markets.

As the graph describes, there has been an increase in local corporate shareholders within the ‘free fl oat’, while the decline in retail shareholders has continued.

DELIVERING VALUE TO OUR REGULATORS

We continue to monitor our performance and deliver value to our investors through our financial performance and through how we engage and communicate with them.

We have launched dedicated contact channels for investors via the email address: Safaricomshares@image.co.ke and telephone number +254 7090-170041. We have also introduced internal SLAs for response times following a query and will endeavour to respond within 24 hours, unless the query requires additional input, in which case it will be addressed within 48 hours.

Robust financial performance given conditions

We delivered robust financial performance yet again this year, which has resulted in further dividend growth and share appreciation.

During the year, our net income grew from KES 48.4 billion in FY17 to KES 55.3 billion. Our free cash fl ow also increased from KES 43.5 billion in FY17 to KES 55.4 billion. We also achieved an EBITDA of KES 112.8 billion, up from KES 103.6 billion in FY17. The EBITDA was suffi cient to reduce our net borrowings by KES 12.5 billion, pay dividends of KES 38.9 billion and invest KES 36.4 billion of CAPEX.

Sustainable development in financial markets

An expression of our commitment to the SDGs and goal 17, in particular, we were silver sponsors of the 7th Building African Financial Markets (BAFM) seminar in Nairobi. The theme of the seminar was “adaptive innovation as a lever for growth and sustainable development of financial markets”.

Active investor engagement

We continue to engage with individual investors, fund managers, analysts and other members of the investment community actively. On a regular, ongoing basis, we deliver value to these important stakeholders by ensuring that we are available to them and that we respond to their telephonic, email and message-based enquiries swiftly. We also publish an annual report to keep investors updated on financial and non-financial performance, and we hold an annual general meeting, which
provides a forum for discussion and debate with shareholders.

We also disseminate information about financial results, reports and upcoming events to shareholders via press releases and other communiqués. In addition, we invite shareholders and other members of the investment community to briefings and workshops as required.

During the year, we hosted investor road shows to share our interim and full year results. During these roadshows, we update shareholders on our strategy and outlook. Roadshows were held in the UK, Europe, America, Canada, Johannesburg and Cape Town, as well as Nairobi.

We also continue to maintain an up-to-date investor dashboard on the Safaricom website, which enables investors to access a wide range of information conveniently and easily, including our investor calendar of events and forms, analyst coverage, fact sheets, share price information, half year and full year results, along with information regarding our current governance processes, sustainability objectives and performance.