Amid the ongoing fallout of the COVID-19 pandemic in 2021, Mobily remained firmly committed to the realization of our GAIN strategy and the digitization objectives of Saudi Arabia’s Vision 2030 and ICT Strategy 2023. Our relentless efforts in this regard have seen Mobily fulfil its promises to our Shareholders, employees and the community by delivering highly encouraging financial returns alongside increasingly advanced and customer centric services for the people and businesses of the Kingdom.

As Saudi Arabia enters a new phase of growth in the wake of the pandemic, driven by its extensive range of investment programs, goals and initiatives, Mobily is supporting an economic resurgence that will position the Kingdom for unprecedented economic diversification and growth.

Mobily continues to be guided by our robust GAIN strategy, which seeks to maximize value by leveraging the key enablers of our success, strengthening our proposition through improved customer journeys, new and innovative channels and fit-for-purpose business models.

This strategy has directly resulted in the impressive gains secured by Mobily in 2021 across all performance metrics, continuing our trajectory of faster, more profitable and sustainable growth.

Among the core components of GAIN are our efforts to accelerate digital revenue streams while improving customer service – 2 areas in which Mobily has excelled in 2021, outperforming our market and generating widespread acclaim.

We remain committed to realizing further benefits from GAIN as we enter the final year of the strategy, delivering increased value and returns for all our Shareholders and Stakeholders, whilst also supporting the Kingdom’s comprehensive development journey encapsulated in Saudi Vision 2030.

Serving the Kingdom

Mobily remains dedicated to supporting the goals and aspirations of Saudi Vision 2030 and the ICT Strategy 2023 to establish a fully connected and innovative Saudi Arabia.

We play an active role at the forefront of the Kingdom’s efforts to develop the ICT sector, empower small and medium-sized enterprises (SMEs), entrepreneurs and end users, and realize increasing levels of government integration.

Working to complement the objectives of the Saudi Arabian Communications and Information Technology Commission (CITC), we are proud to play our part in bringing about a new era of digitization in the Kingdom.

Throughout 2021, therefore, Mobily continued to improve our capacity to deliver complex digital projects in line with the Saudi Vision 2030 for increasing digitization.

Notably, we delivered the world’s biggest ever rollout of a Smart metering solution covering the domestic and industrial segments. This project not only earned praise from the Kingdom’s leadership, but also solidified our position as a leading digital service provider in Saudi Arabia.

In the SME space, we extended credit facilities to the SME segment to ensure continuity of services and support from Mobily, cementing our position as a strategic partner in SME business growth in the Kingdom.

We also entered into an agreement with Monsha’at, the General Authority for Small and Medium-sized Enterprises, to support the adoption by SMEs of innovative technologies to achieve sustainability, efficiency and growth in the Saudi market leveraging 5G.

Throughout the pandemic, Mobily has supported the Government’s various efforts to establish efficient and effective distance learning infrastructure and has played a critical role in the health sector by facilitating the activation of a Kingdom-wide Health Information System to support the Kingdom’s digital health initiatives.

We engaged with the Government to support its plans for the transportation segment and smart city initiatives, and successfully provided connectivity services to Saudi diplomatic missions in conjunction with the Ministry of Foreign Affairs (MOFA) in 160+ countries worldwide.

Mobily’s exceptional investment proposition

Through our expansion, innovation and growing customer base, Mobily continues to maximize value for our Shareholders. Our outstanding financial and operational performance in 2021 has positioned us as one of the top telecommunications investment opportunities in the MENA region.

Based on the Company’s valuation discount, dividend outlook and growing ROI, EFG-Hermes and HSBC Global Research upgraded Mobily to Buy, Bank of America upgraded Mobily twice from Underperform, and Al Jazira Capital updated Mobily to an Overweight rating.

In November 2021, the Board of Directors recommended the distribution of SAR 654.5 million in cash dividends to Shareholders for the fiscal year 2021 on 770 million eligible shares, at a dividend value per share of SAR 0.85. This represents an 8.5% dividend return on share par value and it will be distributed on a date to be approved by the General Assembly.

Ensuring robust Governance and Risk Management

In 2021, with the conclusion of the term of Mobily’s Board of Directors that covered 1 December 2018 to the end of November 2021, Mobily held its General Assembly to elect our new Board of Directors for a 3-year term starting from the beginning of December 2021 to the end of November 2024. A new Board of Directors was elected, with Dr. Nabeel Mohamed Al Amudi as the new Chairman, and Mr. Suliman Abdulrahman Al Gawiz as the new Vice Chairman.

Unlocking value through sustainability

Sustainability, and environmental, social and corporate governance (ESG), are deeply embedded in Mobily’s corporate strategy and internal culture.

Guided by our dedicated sustainability strategy, which reflects both the sustainability goals of Saudi Vision 2030 and the United Nations Sustainable Development Goals (SDGs), we are working to unlock Saudi Arabia’s digital future by incorporating socially and environmentally sustainable practices across our operations, whilst upholding global best practices in terms of governance, transparency and accountability.

Throughout 2021, Mobily delivered a program of initiatives to safeguard our operating environment and that of the communities we serve through resource rationalization, reduced energy consumption and increasing environmental awareness.

The health and wellbeing of our people and customers remained a priority during 2021, especially given the lingering effects of the pandemic, and Mobily continues to strive to set an example for the sector as a responsible, equitable and diverse employer.

The sustained safety and security of the broader society also remains an important focus for Mobily, with our Investor Relations Department taking the lead in implementing the Mobily ESG strategy through activities to ensure significant and sustainable positive impacts for the Kingdom and its people.

Acknowledgements

On behalf of myself and my colleagues on the Board, I wish to thank our Executive Management for their continued resilience in the face of the uncertainty and challenges of this year. Their exceptional foresight and perceptive decision-making during 2021 have been vital factors in the remarkable success Mobily has achieved this year.

Finally, I would also like to express our gratitude and loyalty to The Custodian of the Two Holy Mosques, and His Royal Highness, The Crown Prince, for the progress and prosperity the Kingdom has achieved under their wise leadership, and to our strategic partners and Shareholders for their trust and support, as we continue our journey of expansion, growth and success.

While the green shoots of recovery were seen across the economy in 2021, it was a year of significant challenges for the Kingdom and its people. Despite the lingering effects of the pandemic and the sluggish return to pre-COVID activities, Mobily recorded an outstanding year of performance, rewarding the trust placed in us by our customers, Shareholders and employees by delivering sustainable growth and outpacing the competition.

We remained true to our dynamic GAIN strategy throughout the year, securing significant progress toward our goal of establishing Mobily as the digital telecommunications provider of choice for the people of Saudi Arabia by delivering excellence across all aspects of our business, adding value for our customers and securing increased returns for our Stakeholders.

This allowed us to increase our market share, grow our income and revenue, and cement the value of our brand despite the ongoing economic disruption.

Delivering GAIN

Despite the challenges remaining in the wake of the pandemic, Mobily delivered excellent progress in implementing our GAIN strategy, which aims to Grow core revenues; Accelerate digital revenue streams; Implement and optimize efficient delivery of services; and Nurture a positive experience for all.

A major aspect of the strategy is our continuing digitization journey, including our extensive 5G activities. The 5G program gained pace in 2021, with the extension of our network to serve 52 cities through 4,120 5G sites across the Kingdom, bringing our 5G coverage to 75% in 6 main cities.

As well as providing exceptional consumer network access, our investments in 5G are positioning Mobily at the forefront of change, and as a torch bearer for the technology in Saudi Arabia as businesses begin to leverage 5G capabilities to drive their development going forward.

Mobily’s Fiber-to-the-Home (FTTH) services also saw encouraging growth throughout 2021, as demand remained high for premium home services. We also accelerated the rollout of open access FTTH utilization.

Strong performance amid a slow recovery

Mobily’s performance continues to grow from strength to strength. We increased our market share in 2021 and achieved the highest annual revenues in the last 8 years, with an overall revenue growth of 5.6% to reach SAR 14.83 billion.

Mobily recorded a net profit of SAR 1.07 billion in 2021, representing a rise of 36.8% over that achieved in 2020, whilst our EBITDA increased to reach SAR 5.59 billion – the highest ever annual EBITDA in the last 8 years.

Our Business Unit has consistently generated double digit growth in revenues, collections and gross margins; secured steady improvements in customer satisfaction in terms of performance and preferences; and grown our subscriptions across all product categories.

Our growing customer base and client retention strategies saw internet data consumption increase throughout the year, supported by a rise in Mobily’s mobile internet average download speed by 98.69% to reach 155.18 Mbps, and an increase in our fixed internet average download speed of 16.94% to reach 89.17 Mbps. In addition, our mobile 5G average download speed rose 48.03% to reach 326.94 Mbps.

We continued to focus on our key value segments, advancing sales of higher post-paid packages and promoting the uptake of pre-paid bundles.

Award-winning services

Our achievements in 2021 received widespread recognition, with Mobily being named the Top-Rated Mobile Network in Saudi Arabia by the Ookla Speedtest Awards.

Our commitment to customer experience excellence was recognized by receiving the ‘Best Customer Experience Award 2021 for the Individual Sector’ from the Communications and Information Technology Commission (CITC), the first company to win this award that aims to stimulate and develop the Saudi telecommunications sector, raising competitiveness, increasing transparency and improving user experience.

We received a record 9 Platinum Awards at the VIDDY awards for digital video excellence, as well as 6 Platinum and 1 Gold award at the Hermes Creative Awards.

Mobily was also awarded 16 Platinum and 1 Gold Award at the 2021 AVA Digital Awards, as well as 1 Gold, 1 Silver and 2 Bronze Awards at the Dubai Lynx International Festival of Creativity.

We also received the Best Recruitment and Talent Management Strategy Award at the CIPD Middle East People Awards for presenting a clear talent acquisition roadmap aligned with business needs, whilst our Annual Report for 2020 received awards for Best Annual Report in both the print and digital categories of the Middle East Investor Relations Association (MEIRA) Awards.

Committed to ESG

Mobily is committed to ensuring the highest global standards of environmental, social and corporate governance across our operations and footprint, supporting our country, our people, our environment and the communities we serve through a carefully formulated strategy.

This strategy focuses our sustainability efforts over the coming years to achieve rapid improvements in ESG performance whilst also supporting the Kingdom’s broader sustainability commitments in line with the United Nations Sustainable Development Goals.

The objectives of the strategy range from the integration of sustainability at the corporate level, to maximizing customer care and satisfaction and supporting the Saudi Green initiative, which seeks to place the Kingdom and its people on a path to a sustainable future.

It has inspired a range of Mobily initiatives, including our agreement with Ericsson to recycle old electronic devices in ways that contribute to preserving the environment. The partnership leverages Ericsson’s Product Take-Back Program – which ensures that end-of-life products are either recycled or disposed of in a responsible way – to co-manage our waste in an environmentally sustainable way.

We also continue to reduce the carbon intensity of our operations and products as a whole, using advances in ICT to create more sustainable pathways and meet the challenge of climate change, in line with the objectives of Saudi Vision 2030.

Furthermore, our ESG strategy seeks to guide our community investment decisions going forward to maximize benefits in the areas of: education; technical support; personal and public health; responsible resource use and waste management; global climate change mitigation; equal opportunities for men, women and people of determination; and support for the needy in society.

We continue to develop internal metrics and targets for all Mobily departments to ensure the delivery of this strategy, whilst maintaining a high level of transparency and consultation to continuously refine our actions and outputs.

A customer centric approach

Mobily is dedicated to following customer centric approaches to the development and delivery of our services and solutions. Our customer satisfaction score (CSAT) and all other Customer Experience metrics witnessed significant improvements in 2021.

A testament to the value we place on customer satisfaction, Mobily maintained the lowest number of complaints for more than 2 years in mobile telecommunications services and fixed internet services, and the lowest number of complaints for more than 4 years in mobile internet services, among the Kingdom’s 3 national operators.

We remain committed to providing exceptional service quality for our customers, and continue to facilitate improved download speeds, and deliver innovative apps and web touchpoints.

Engaged and productive talent

Given the ongoing fallout of the COVID-19 pandemic in 2021, we continued to support and safeguard our people throughout the year, reflecting the high value we place on our human resources and the broader communities we serve.

By implementing strict policies and procedures and establishing new workplace controls, we ensured a safe and healthy environment for our employees and customers, particularly as all of our people returned to in-office work in October 2021.

We also continued to actively attract, develop and empower our people in a way that strengthens our success as a company whilst also reflecting our dedication to the goals and objectives of Saudization and female empowerment in the Kingdom.

Mobily in 2022

As we look ahead to 2022, Mobily’s unique digital capabilities and technologies ensure that we are well positioned to capitalize on future growth opportunities.

Mobily will continue to execute our comprehensive GAIN strategy, which has positioned us for another year of growth. We will seek to further enhance our position as an integrated digital telecommunications provider, fit to meet the diverse demands of a revitalized economy and achieve the goals and aspirations of Saudi Vision 2030.

Under GAIN, our technology focus will endure, as we rollout an extensive program of pipeline projects to improve efficiency, deliver industry-leading services and secure even greater customer satisfaction throughout 2021.

Mobily’s investment in the 5G rollout and our expansion into new, complementary business areas to better serve our customers will also serve to capture more revenue, securing increased returns for our Shareholders and other Stakeholders.

Further investment in submarine cables around the world will also be forthcoming, as well as in our data centers and other leading-edge technologies.

We will also further integrate our new ESG strategy into the GAIN strategy to deliver world-class governance standards across our organization.

Acknowledgements

I wish to express my deep gratitude to our Board of Directors for their guidance in what has been another challenging year, and to our Executive Management for their leadership and foresight in navigating adverse circumstances.

I am also indebted to our employees across Mobily for their professional approach, commitment and dedication, which has allowed us to reach new heights and look to the future with considerable optimism. Their efforts represent the driving force behind our performance in 2021, and a key differentiator for our Company going forward.

Mobily contined to achieve an outstanding financial performance in 2021, building on the strong momentum in the previous 2 years to overcome ongoing turbulence in global and local markets due to the impact of COVID-19. Delivering record and best-in-class profitability on the back of increasing revenues and strong results across the business, Mobily’s GAIN corporate strategy continues to grow our market share, cash flow and distributed dividends, coupled with continued improvements in operational efficiencies to create increasing value for our Shareholders, laying the foundation for sustainable growth and success in the years ahead.

It is my pleasure to report that during 2021, the exceptional efforts and continued dedication of the entire Mobily team continued to pay dividends for Shareholders, as we achieved impressive financial results across the board while continuing to invest for the future. Mobily’s strong cash flow generation enabled us to continue to invest in our growth this year, while paying attractive dividends and carrying out a deleveraging strategy.

Mobily’s net profit continued its rapid rise to reach SAR 1.07 billion, the highest annual profit in the last 8 years, based on 5.6% growth in revenues and EBITDA margin stability, cost discipline and deleveraging. Through the diligent execution of our GAIN strategy, we accelerated our digitization agenda, enhanced customer experience, diversified our income streams and, overall, made significant strides towards our vision of ‘Empowering the Digital Economy to Unlock Possibilities.’

Top line results rose by 5.6% from SAR 14.05 billion in 2020 to reach SAR 14.83 billion this year. This was driven by solid performance by our Business Unit and Consumer Unit, including FTTH growth, along with healthy subscriber base growth. Our Consumer Unit and Business Unit delivered revenue growth, demonstrating their resilience and capitalizing on increased market activity, which accelerated towards year-end 2021.

EBITDA for 2021 rose by 4.6% and maintained last year’s margin of 38% – the highest since 2014. This result was driven primarily by healthy top line performance and supported by continuing improvements in operational efficiency and cost optimization. This strong performance drove our net debt to EBITDA ratio to 2.17x - its lowest level since 2016 – a downward trend supported by Mobily’s ongoing deleveraging strategy and 10% reduction in financing charges year-on-year to SAR 505 million.

Investment in 5G infrastructure continued in 2021 while overall CAPEX eased by 25.1% during the year to reach SAR 2,092 million compared to SAR 2,792 million in the previous year, as various capital intensive strategic initiatives were successfully completed. CAPEX intensity reflects our commitment to improve our infrastructure, and the continuous deployment of the network modernization project to improve overall quality of service for our customers, including increasing capacity (data centers, cloud, etc.) to support our strategic growth across our revenue streams (business, consumer and wholesale).

Continuing the momentum since 2019, as our GAIN Corporate Strategy continued to accelerate and create value for our business and Shareholders, this year again saw a large increase in profitability, with a 36.8% increase in full-year net profit to reach SAR 1.07 billion, compared to last year’s net profit of SAR 783 million. In addition to a gross profit of SAR 8.67 billion compared to SAR 8.15 billion in the previous year, this outstanding achievement, which represents the highest net profit since 2014, is equivalent to earnings per share of SAR 1.39 versus SAR 1.02 in 2020.

Our cash position has also witnessed significant improvement during 2021, with operational cash flow (EBITDA-CAPEX) rising 36.9% year-on-year to reach SAR 3.50 billion for the year, while cash and cash equivalents also rose by 13.0%, from SAR 929 million in 2020, to surpass SAR 1 billion for this year.

In the year ahead, we will continue to drive positive performance and results through the execution of the strategic pillars of our GAIN corporate strategy. By investing in our human capital, infrastructure and digitization, we will accelerate our transformation to fulfill our role as a catalyst of positive change in the Kingdom while enhancing services and experience for our customers. Our strong brand and excellent financial performance for the year gives us confidence in our strategic direction and our ability to generate increasing value for our Company and our valued Shareholders.