Dear Stakeholders,

On behalf of the Board of Directors, I am delighted to present to you the Group’s financial and non-financial performance report for the year ended 31st December, 2021. The year under review showed promising signs of recovery following a challenging previous year given the unprecedented Covid-19 pandemic that ravaged the world.

The effects of the pandemic, including new variants, continued to be felt across East Africa through the enforcement of a mix of containment measures such as nightly curfews, and school closures in some countries. More disruptive measures like lockdowns, partial border closures, and travel restrictions were phased, limiting social and economic activity. It is on this basis that East African economies experienced marginal growth while recovering from the sharp contractions due to the Covid-19 pandemic. Business slowed down across various sectors with industries such as tourism, manufacturing, transport and hospitality experiencing deterioration.

The current rebound is fueled by elevated commodity prices, a relaxation of stringent pandemic measures and recovery in global trade. However, it remains vulnerable in light of low rates of vaccination on the continent, protracted economic damage, and a slow pace of recovery. The World Bank projects that growth for 2022 and 2023 will remain just below 4%, continuing to lag behind the recovery in advanced economies and emerging markets.

The outlook is trending positively with anticipated recovery of various sectors such as hospitality, trade, transport, and other services dependent on faster vaccination to help prevent new waves of infections and associated containment measures. Indeed, we have seen a lot of progress and efforts by Governments and private sector actors across the region to encourage vaccinations, including requiring compliance as a condition for accessing Government service.

At NMG, we took measures including aggressive and sustained vaccination drives to protect the safety and well-being of our employees, families, partners, customers and other stakeholders across all our markets. The Group has so far achieved more than 75% vaccination of its employees across all its markets. We will continue to support Governments in the region by encouraging more vaccinations and partnering for private sector growth.

Political Landscape

East African democracies continue to go through political transition as was evidenced in 2021. In March 2021, Tanzania went through a challenging time when the then President H.E. John Pombe Magufuli passed on and was succeeded by his deputy H.E. Samia Suluhu Hassan. The change of guard happened in a peaceful way and the new president has fared well in her leadership. She managed to thaw a relationship between opposition parties and some international organizations with the Government who had been at loggerheads with the State on infringement of democratic space, imprisonment of critics and handling of Covid-19 pandemic. She also reiterated her strong support for private sector development, which has seen improvement in its relationship with the Government.

Its neighbour to the North, Kenya, will undergo a General Election in August 2022 that will see a new president taking over. There are also Gubernatorial, legislative and other elective positions. Some concerns on the campaigns so far include emergence of a large but apparently disinterested youth voter constituency; slow preparation of electoral infrastructure including laws, and rising political intolerance, including hate speech, incitement and high incidence of disinformation.

To respond to this challenge, the Group has taken up its role in raising public attention to the key isssues with a rallying call to unify the citizenry before, during and after the elections. In this regard, NMG launched the “Mimi Mkenya” initiative, which aims to promote patriotism, issuebased elections, peace and unity beginning at the grass roots, and spreading across the country. The campaign seeks to inculcate a sense of ownership and responsibility among Kenyans and various stakeholders from corporates, development partners, national institutions, friends of Kenya and all other stakeholders to work together towards peaceful elections in August 2022.

Through the Mimi Mkenya initiative, the Group has reiterated its commitment to its editorial policy to cover all candidates fairly, objectively but fearlessly; provide a platform for everybody who would like to take advantage of; hold leaders accountable to a set of issues important to the country and the Kenyan people through its ‘Nation Agenda’ (NMG has developed key areas to drive issue-based campaigns on matters of high public interest). We will also fearlessly advocate against incitement, hate speech and disinformation; engage the youth and provide them a platform to air their issues and fact check what leaders say and call them out on disinformation, inaccuracies and deliberate omissions

Financial Performance

The Group posted a turnover of Shs 7.6 billion and a profit before tax of Shs 0.7 billion, registering an improvement from 2020 when we realised Shs 6.8 billion and Shs 0.1 billion respectively. The business recovery resulted from reopening of most economic sectors and easing of some the pandemic related restrictions such as lockdown. The Group registered significant growth on the back of accelerated digital initiatives, television and print revenue recovery. In addition, targeted cost management measures were undertaken to improve operational efficiency and increase productivity.

Dividends

Despite the challenging economic environment, the business is gradually recovering from the global pandemic effects. The directors recommend payment of a final dividend of Shs 1.50 per share on issued and paid-up share capital as at 31st December 2021, with the exclusion of treasury shares repurchased during the year. No interim dividend was paid during the year.

Share Buyback

The Shareholders during an AGM held on 25th June, 2021 approved a Share Buyback of up to ten percent (10%) of its issued and paid-up share capital at a premium price of Shs 25 per share in accordance with the provisions of the Companies Act (2015) of the Laws of Kenya. This gave the shareholders an opportunity to cash in on their investments. The Buyback closed on 24th September, 2021 with an impressive uptake of 82.45% (17.1 million shares). The shares repurchased are held by the company as Treasury shares.

Digital Transformation Journey

The Group’s digital transformation has been encouraging with 2021 witnessing an important milestone in beginning the journey to shift its business model to a mixed one with advertising and reader revenue being key pillars driven by digital content while exploring new revenue streams in the events and technology space.

In February 2021, NMG became the first media company in East and Central Africa to launch a paid subscription service for its digital content. Considering the unchartered territory we find ourselves in, we are delighted with the progress in terms of significant growth in audience acquisitions through registrations and paid subscriptions, expansion of compelling content covering the Africa continent and enriching our content formats to new media formats such as podcasts, puzzles, video and newsletters.

Thought Leadership

The Group continued in utilising its convening power to shape the development and future of the region and Africa through its countryspecific and Pan-African platforms. We hosted a series of virtual Nation Leadership Forums (NLF) in Kenya and Mwananchi Thought Leadership Forums in Tanzania. These dialogue forums delved into key areas such as agriculture, health, Small and Medium Enterprises (SMEs), manufacturing, education, technology and taxation, among others, bringing together diverse experts to deliberate on development issues affecting the region. NMG’s vision for being a ‘Media of Africa for Africa’ was strengthened when it held the third edition of the Kusi Ideas Festival, in West Africa - Accra, Ghana in December 2022. From Kusi I (Kigali, Rwanda) to Kusi II (Kisumu, Kenya), a new urgency was injected into the Pan-African ideas conversation, and this edition sought to review the importance of continental cooperation, under the theme “How Africa Transforms Under the Virus”. The location selected for the third edition of the festival was almost poetic in that Accra plays host to the African Continental Free Trade Area (AfCFTA) Secretariat Headquarters, therefore providing the perfect venue to discuss the 2021 theme.

The conference attracted 34 speakers, from across the African continent as well as international speakers with an interest and expertise in the continent. The third edition of the Kusi Ideas Festival was co-hosted by H.E. Nana AkufoAddo, President of the Republic of Ghana and attracted participation from H.E. Paul Kagame, President of the Republic of Rwanda, H.E. Yoweri Museveni, President of the Republic of Uganda, H.E. Rebecca Grnyspan, Secretary General of United Nations Conference on Trade and Development (UNCTAD); H.E. Wamkele Mane, Secretary General AfCFTA; H.E. Dr. Peter Mathuki, Secretary General of East Africa Community, among other stakeholders including experts, innovators, academia, entrepreneurs, captains of industry, and representatives from the diplomatic community. It was attended by 1,080 in-person delegates, a record 17,000 virtual delegates from 72 countries and 401 cities and attained over 200 million impressions on social media.

Sustainability Agenda

The Group’s focus on building a sustainable business for the future gained more critical importance following the lessons learnt from the Covid-19 pandemic. Our business will only derive and deliver value if it sustains the efforts to embed sustainable business practices across all operations and pays attention to environmental, social and governance issues. The Group has very strong governance structures including an adaptive approach in managing key risks material to the business with a clear monitoring and escalation matrix. I am encouraged through NMG’s efforts in playing a critical role in environmental sustainability.

The Group has established a magazine called ‘Climate Action: Why it Matters Campaign’ which convenes environmental experts to drive key conversations on climate change. The magazine has been recognised internationally at the 2021 International News Media Association (INMA) World Media Awards. It is this commitment that drove the Group to play a convening role to rally Kenya in discussing climate change positions in readiness for COP26. Further, the Group has entered into strategic partnerships in key environmental initiatives such as the adoption of a nursery to reclaim water catchment areas in Uasin Gishu and Machakos Counties. Our commitment is to scale up these activities while playing a convening role to bring on board more partners and drive for behavour change through all our media platforms.

NMG across the region continues to develop and implement social impact initiatives in areas such as health, education, environment, disaster relief, and community development. In this regard, the Group has registered the ‘Nation Media Foundation’ to enable it deploy resources and attract key strategic partnerships that will result in an expansion of Sustainable Development Goals (SDGs) initiatives. This will be a critical vehicle for creating shared value shareholders and stakeholders.

Board Changes

The previous year saw some changes in the Board. Prof. Samuel Sejjaaka was appointed as a Non-Executive Director and Chairman of the company’s subsidiary in Uganda, Monitor Publications Limited in January 2022. This was following the passing of Dr. Simon Kagugube in 2021. The board will greatly benefit from his vast experience in management, governance oversight over public interest companies and strategy formulation.

Our People

The Group’s digital transformation will take place, not only through technology but more specifically through a vibrant, agile, adaptive, and multi-skilled pool of talent. In this regard, NMG’s focus is in beefing up its internal capacity through re-skilling and upskilling the current team while at the same time acquiring new expertise.

Looking Ahead

In the year ahead, the Group is cognisant of the unique opportunities and challenges that exist in the digital space. We continue to learn significant lessons that inform our continuous innovation and improvement as we set our eyes on achieving the strategic North Star of becoming a modern digital content company. Hence, the focus will be to accelerate existing products in digital spaces to foster growth in new revenue streams and audiences.

To enable us succeed, we will continue building new products, invest and enter key strategic partnerships for content, technology and talent. Lastly, we will identify mergers and acquisition opportunities for products that will help the Group drive value in key social impact areas such as agriculture, youth, environment, education, technology among others. This will also entail exploring entry into new emerging markets such as Ethiopia, Democratic Republic of Congo (DRC), Nigeria, Malawi and Ghana. The Board is pleased with the measures management and staff deployed, amidst a difficult period to put the Group on a path of recovery. The Board is satisfied with the company’s strategic outlook and the plans in place to continue securing NMG as a sustainable business.

Let me take this opportunity to thank my fellow directors on the Board for their commitment, passion, and wise counsel. I sincerely appreciate their significant contribution during a time when leadership was required to navigate the ship through rough waters.

All in all, the recovery we have experienced would not have been possible without the hard work, tireless efforts, excellence, and teamwork of the management and staff of NMG. My deepest gratitude goes to all of you. I thank each one of you for being a champion of our mission, sharing a common mindset, driven by the set of values that we live by. My sincere appreciation for the continued support of our business partners, customers, and other stakeholders. Ahsanteni sana!