Safaricom 2023 Sustainable Business Report

89 OUR BUSINESS KPI SUMMARY OUR MATERIAL TOPICS PATHWAY TO A PURPOSE-LED TECHNOLOGY COMPANY OUR STAKEHOLDERS UNDERSTANDING OUR SHAREHOLDER BASE The breakdown of shareholders over the last four years has remained consistent. As indicated in the table below, the foreign corporates shareholding of the free float declined from 43.7% to 35.8%. This was due to the rise in interest rates in developed markets that subsequently led to an increase in bond yields prompting recall of cash by many foreign investors from emerging and frontier markets to ‘risk free’ government securities in their home countries. However, this was balanced by support from local corporate and individual investors, with the local corporate share of the free float increasing by 6.6%. BREAKDOWN OF SHAREHOLDERS FY20 FY21 FY22 FY23 Vodacom 35% 35% 35% 35% Vodafone 5% 5% 5% 5% Government of Kenya 35% 35% 35% 35% Free float 25% 25% 25% 25% PROPORTION OF ‘FREE FLOAT’ SHAREHOLDERS BY CATEGORY FY20 FY21 FY22 FY23 Foreign corporate 44.7% 45.6% 43.7% 35.8% Local corporate 39.7% 39.4% 41.2% 47.8% Local individual 15.3% 14.6% 14.8% 16.0% Foreign individual 0.4% 0.4% 0.4% 0.4% INTERACTING CLOSELY WITH OUR SHAREHOLDERS Our management team continued to engage investors and shareholders during investor conferences and roadshows that were both physical and virtual. A highlight was our inaugural investor day in Feb 2023. Held as a hybrid event, the management team provided hands-on insight regarding the business strategy and various business unit products and services that align to our purpose This event was the first of its kind in Kenya and feedback from attendees indicated that the event enhanced their understanding of Safaricom and our strategic priorities. Major areas of interest from our investors included the regional expansion into Ethiopia. The decline in free cash flow from KSh 63.67 billion in FY22 to KSh 23.85 billion, as well as the decline in EBITDA from KSh149.06 billion to KSh 139.86 billion were key topics under discussion. We explained that these developments were due to our commercial launch in Ethiopia in October 2022 which incurred significant costs, but that we remain confident about the growth prospects of our Ethiopian expansion. Other issues under discussion were the macroeconomic environment, traction on new growth areas, the evolution and future of M-PESA, regulatory environment, digital partnerships and the company’s strategy as we transition into a technology company by 2025. In addition, we saw increased interest and engagement by fund managers and investors with the management team on how we are driving sustainable business and the UN SDGs into our various products, services and day-to-day operations. ISSUES FOR INVESTORS OUR HIGHLIGHTS SHAREHOLDERS • Successful inaugural Investor Day. • Sound financial performance despite launch in Ethiopia in October 2022 which involved substantial capital investment. • Granting of licence to operate mobile money services in Ethiopia (announced shortly after year-end). • Institutional investors are increasingly focused on ESG issues. • Details regarding our expansion in Ethiopia. For further information about our financial performance in FY23, please refer to https://www.safaricom.co.ke/investor-relations.