Financial results presentation. For the year ended 31 March 2013

Transcription

1 Financial results presentation For the year ended 31 March 2013

2 Important information This presentation contains forward-looking statements as defined in the United States Private Securities Litigation Reform Act of Words such as believe, anticipate, intend, seek, will, plan, could, may, endeavour and similar expressions are intended to identify such forward-looking statements, but are not the exclusive means of identifying such statements. While these forward-looking statements represent our judgments and future expectations, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. These include key factors that could adversely affect our businesses and financial performance. We are not under any obligation to (and expressly disclaim any such obligation to) update or alter our forward-looking statements whether as a result of new information, future events or otherwise. Investors are cautioned not to place undue reliance on any forward-looking statements contained herein. 2

3 Glossary of terms ARPU: B2C: DTH: DTT: FCF: FEC: FX: GEM: GMV: Average revenue per user Business to consumer Direct-to-home television Digital terrestrial television Free cash flow Forward exchange contract Foreign exchange Global emerging markets Gross merchandise value HEPS: Headline earnings per share HD: High definition IM: Instant messaging MAU: Monthly average users MMOG: Massively multiplayer online game PCU: Peak concurrent users SNS: Social network service SSA: Sub-Saharan Africa VAS: Value-added services 3 3

4 Group Overview Financial Results Internet Pay-TV Outlook Appendix 4

5 FY13 key financials: Synopsis Revenue (ZARbn) Trading profit (ZARbn) Mar 12 Mar 13 Development spend (ZARbn) 27% 1% 51% Free cash flow (ZARbn) Core HEPS (ZAR) DPS (ZAR) 4% 20% 15%

6 Top line growth momentum Revenue (ZARm)* 36% 80,000 70,000 60,000 50,000 40,000 76,776 30,000 20,000 34,505 37,251 45,103 56,522 10,000 - Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 * Based on economic interest, i.e. assuming all equity accounted investments are proportionately consolidated 6

7 Spreading risk by diversification Segmental revenue split* Geographic revenue split* Revenue by type* Internet (45%) Pay TV (39%) Print Media (16%) South Africa (38%) Asia (28%) Europe (14%) Rest of Africa (11%) Latin America (8%) Other (1%) Subscription (33%) VAS & games (23%) ecommerce (16%) Advertising (11%) Printing & distribution (7%) Other (7%) Technology (3%) * Based on economic interest, i.e. assuming all equity accounted investments are proportionately consolidated 7

8 Growing more organically Development spend vs. other operating costs*(zarm) 45,000 4,267 36,000 2,823 27,000 1,211 1,240 1,535 38,361 18,000 9,000 20,363 21,311 25,712 29,520 - Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 Other operating costs Development costs * Other operating costs = Revenue minus EBITDA minus development spend 8

9 Earnings growth boosted by currency uplift (once-off) Core headline earnings (ZARm)* 9,000 8,000 FX % 7,000 6,000 5,000 4,000 3,000 2,000 4,373 5,319 6,036 6,951 7,719 1,000 - Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 9

10 Consistent dividend growth DPS (ZAc/share) Mar 03 Mar 04 Mar 05 Mar 06 Mar 07 Mar 08 Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 10

11 Group Overview Financial Results Internet Pay-TV Outlook Appendix 11

12 Summarised consolidated income statement Select information Mar 12 ZARm Mar 13 ZARm Revenue* 56,522 76,776 Less: Associates (17,035) (26,527) Consolidated revenue 39,487 50,249 Finance costs up Higher debt levels to fund acquisitions Normalised preference dividend income Trading profit 5,669 5,729 Trading margin 14% 11% Net finance costs (697) (1,316) Income from associates Includes ZAR2.6bn once-off book profit on Mail.ru s partial sale of Facebook Share of equity accounted results 3,869 9,001 Other (834) (2,200) Taxation (2,059) (2,552) Other ZAR2.1bn impairment mainly on Abril Net profit 3,481 6,748 Core headline earnings 6,951 8,533 Core headline EPS (ZAR) * Based on economic interest, i.e. assuming equity accounted investments are proportionately consolidated Core headline earnings +23% Increased 11% YoY in constant currency 12

13 Internet now largest revenue segment Incremental revenue YoY* (ZARm) FY13 revenue by business* 80,000 60,000 80% 20% 1% 36% 4, ,776 15,395 11,932 34,587 40,000 56,522 56% of total revenue growth organic 30,257 20,000 Mar 12 Internet Pay-TV Print Mar 13 Internet (45%) Pay TV (39%) Print (16%) * Based on economic interest, i.e. assuming equity accounted investments are proportionately consolidated Internet Expansion across all platforms ecommerce revenue grew 100% YoY Tencent & Mail.ru s revenue +77% YoY Pay-TV 20% YoY increase in subscribers 6% increase in subscription rates Print Negatively impacted by poor macro economy and shift in advertising online 13

14 Step-up in development spend to build ecommerce Incremental development spend YoY (ZARm) 75% 23% 53% 51% FY13 split by business 111 1, (124) 897 4,267 2,823 3,259 Mar 12 Internet Pay-TV Print Mar 13 Internet (76%) Pay-TV (21%) Print (3%) Internet Focus on ecommerce More engineers Increased marketing to build brands Pay-TV ZAR804m for DTT, mobiletv and online ZAR93m for other technologies 14

15 Development cost reducing trading profit Trading profit* (ZARm) FY13 trading profit by business* 15,000 12,000 1,870 44% 18% 32% 23% 1,180 (347) 14, ,163 9,000 6,000 11,762 Increased 12% YoY in constant currency 7,559 3,000 - Mar 12 Internet Pay-TV Print Mar 13 Internet (43%) Pay TV (52%) Print (5%) * Based on economic interest, i.e. assuming equity accounted investments are proportionately consolidated Internet Boosted by Tencent and Mail.ru Trimmed by ecommerce loss of ZAR2bn Building breadth of products Pay-TV DTT roll-out Added local content Stable margins Print SA holding up Cut costs Abril suffered decline in profitability 15

16 Free cash flow trimmed by DTT capex FCF from operations Mar 12 ZARm Mar 13 ZARm Operating cash flow 7,505 8,440 Capex (2,034) (2,767) Finance leases (477) (586) Tax (1,923) (2,689) Investment income 547 1,075 Free cash flow 3,619 3,473 Capex +36% Pay-TV (incl. DTT) ZAR2bn Internet ZAR434m Print ZAR305m Investment income Includes ZAR510m dividend from Tencent, ZAR111m from Abril and ZAR388m ordinary dividend from Mail.ru Free cash flow (ZARm) 6,000 4% 4,000 2,000 3,991 3,619 3,473 - Mar 11 Mar 12 Mar 13 16

17 More bolt-on acquisitions Total acquisition spend (US$m) Other Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 17

18 Balance sheet healthy Group net consolidated debt Mar 13 ZARm Net debt offshore (US$1.4bn) (12,975) Minus: Net cash South Africa 6,354 Closing net debt (6,621) Interest cover 10x Increase a consequence of debt-funded acquisitions Net debt Excludes transponder leases of ZAR6.2bn, considered to be an operating cost Gearing 12% 18

19 Group Overview Financial Results Internet Pay-TV Outlook Appendix 19

20 UK USA Czech China Poland Brazil Turkey Hungary Argentina Chile Romania Russia Mexico Ukraine South Africa Internet: ecommerce evolution ecommerce as % of total retail (2012) 12% 11% 10% 10% 8% UK was 1% in 2004 USA was 4% in % 6% 6% 4% 2% 4% 3% 3% 3% 2% 2% 2% 2% 1% 1% 1% 0% Source: Euromonitor, Centre for Retail Research, ystats.com, Forrester Research, select GEM markets in orange 20

21 ecommerce strategy 21

22 ecommerce financials Further scaling of operations Revenue by type ZARm Mar 12 Mar 13 % Change Revenue 5,736 11, % e-tail (84%) Classifieds (7%) Payments (6%) Other (3%) Trading profit (914) (2,192) -140% Strategy More markets and product categories Some acquisitions in e-tail and classifieds Mobile development a priority Facing competition Financial Revenue growth 20% organic, 11% currency and rest acquisitive Classifieds to be monetised only longer-term Development spend R3.23bn 22

23 ecommerce: financial growth Revenue and development spend (ZARm) 12,000 10, % 88% 8,000 6,000 11,433 4,000 2,000-5,736 3,684 1, Mar 11 Mar 12 Mar 13 3,235 Revenue Development spend 23

24 ecommerce: classifieds Daily visits (m)* % Strategic Market presence in 23 countries Consolidated position in Russia, now own 18.6% of Avito Acquired Tokobagus (Indonesia) and Fixeads (Portugal) Accelerated investment across all key operations Mar 12 Mar 13 Operational Leading position in most markets we operate in Increased marketing spend to build brands Monetisation still some years off Daily page views (m)* Page views by region* % Eastern Europe (38%) Southeast Asia (31%) Western Europe (12%) Africa & Middle East (10%) Latin America (9%) - Mar 12 Mar 13 * Select criteria as measured for the month of March, adjusted for acquisitions 24

25 ecommerce: e-tail Revenue (ZARm) Items bought/sold daily ( 000)* 10, % % 5,000 4,183 9, Mar 12 Mar 13 - Mar 12 Mar 13 Strategic Includes marketplace, B2C and lead-generation Strengthened position with stakes in: emag (Romania), Souq.com (MENA) and Konga.com (Nigeria) Closed Multiply in Indonesia and Sabuy in Thailand Financial 21% revenue growth organic, rest acquisitive Gross margins stable Operational Scaling B2C, expanding categories and payment methods PriceCheck won global Blackberry App of the Year * Select criteria as measured for the month of March, adjusted for acquisitions GMV by region ** Eastern Europe (82%) Africa & Middle East (13%) Latam (2%) Western Europe (2%) Southeast Asia (2%) **Includes GMV for lead-comparison operations on an imputed basis 25

26 Internet: Another solid performance RMBm* Dec 11 Dec 12 % Change Revenue 28,496 43,894 54% Operating profit 12,254 15,479 26% Q statistics 825m monthly active IM user accounts (+10% YoY) 9.2m PCU s for QQ Game Platform (+5% YoY) 611m MAU on Qzone (+6% YoY) 194m combined MAU for Weixin and WeChat Operating margin 43% 35% * Data for FY13 reflects 100% of results Jan-Dec 2012 available on FY13 ZAR/RMB (1.162) Revenue mix* Operations Expanding in highly competitive market Some progress in ecommerce Early evidence of success with WeChat Investment in innovation and technology VAS (81%) ecommerce (10%) Advertising and other (9%) Financials New ecommerce initiatives reducing margins 26

27 Internet: Continued positive growth trajectory RURm* Dec 11 Dec 12 % Change Revenue 15,215 21,151 39% Q statistics portal: 35m 27m SNS: Odnoklassniki 24m EBITDA 8,381 11,534 38% EBITDA margin 55% 55% * Data reflects 100% of Mail.ru Group s FY12 aggregate segment performance as reported. For IFRS results with full disclosure refer to FY13 ZAR/RUR 0.27 (0.25) Revenue mix* Operations Contextual advertising growing Games lively (Warface) Further upgrades to web and mobile products Focus on driving user engagement Community VAS (32%) Display advertising (24%) MMO Games (22%) Context advertising (11%) Other (11%) Other Sold down Facebook stake to 14.2m shares Listing of Qiwi in May realised US$51m 27

28 Group Overview Financial Results Internet Pay-TV Outlook Appendix 28

29 PayTV: focus on local content Viewing homes ( 000) Local content 5,611 6,739 Mar 12 Mar 13 ZAR1,6bn in FY13 decoder subsidies ZAR1bn / >6,000 hours 29

30 PayTV: new technology to expand services DTT Online and mobile 8 countries Various products and devices 30

31 Pay-TV: solid growth in subscribers Pay-TV homes ( 000) 7,000 20% 6,000 2,288 5,000 1,630 4,000 1,099 1,439 3, ,000 1,000 2,401 2,852 3,489 3,981 4,451 Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 South Africa Sub-Saharan Africa 31

32 Pay-TV: Operational dynamics ARPU (ZAR) Programming cost (ZARm) % ,709 4,304 5,497 6,037 6,935 Mar 12 Mar 13 Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 Development spend (ZARm) % Capital expenditure (ZARm) % Mar 09 Mar 10 Mar 11 Mar 12 Mar ,030 1,159 1, Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 32

33 Pay-TV: services in 48 countries across Africa Continue to develop business Mar 12 Mar 13 % Change Net subscribers ( 000) 5,611 6,739 20% ZARm ZARm Revenue 25,259 30,257 20% Trading profit 6,379 7,559 18% Trading margin 25% 25% Net additions ( 000) Subscribers 1,128,000 net additions YoY Compact accounted for 38% of growth GoTV accounted for 31% of growth PVR base increased 26% YoY to 956k Operations More content, including 6 new HD channels BoxOffice SA now >400,000 movie rentals p.m. Expanded online services (BoxOffice/CatchUp) DTT now in 8 countries , Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 Regulation & Competition Increased regulatory pressures Competition growing, including online 33

34 Group Overview Financial Results Internet Pay-TV Outlook Appendix 34

35 Outlook: No change in strategy ecommerce One of fastest growing ecommerce groups globally Focus on classifieds, B2C and e-tailing Strengthen market positions Pay-TV Accelerate subscriber growth Extend online services Intensifying competition More regulation may stifle innovation FY14 Financials Growing organically - focus on innovation, engineering, mobile Thus slower earnings growth relative to topline Currency volatility 35

36 Group Overview Financial Results Internet Pay-TV Outlook Appendix 36

37 Print: Reasonable results despite challenges Revenue mix FY13 ZARm Mar 12 Mar 13 % Change Revenue* 7,686 7,863 2% Trading profit % Trading margin 8% 8% *Includes intergroup adjustments Advertising (34%) Printing (26%) Circulation (19%) Books (9%) Distribution (5%) Other (7%) Environment Exposed to macro economy Long-term erosion of audiences by internet Capex trend Operations Advertising revenue +1% YoY and circulation +3% Printing revenue -3% YoY Solid performance by book publishing Continue to extend digital initiatives % Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 37

38 Print: A leaner spell Environment Slowing economy and weak retail environment Advertising revenues under pressure BRLm Dec 11 Dec 12 % Change Revenue 3,152 2,975-6% Trading profit % Trading margin 12% 3% *Data reflects 100% of results Jan Dec 2012; FY13 ZAR/BRL 4.24 (4.37) Financials Contribution to core headline earnings -ZAR69m Received ZAR111m in dividends Impaired investment Operations Circulation volume +3% YoY Magazine advertising income declined 8% 38

39 Pay-TV: additional information Digital subscriber mix FY13 revenue split 39% 34% 37% 37% 24% 29% Mar 12 Mar 13 Other Compact Premium Subscription (79%) Advertising (7%) Hardware sales (6%) Online/Broadband (4%) Other (4%) 39

40 Core headline earnings Calculation of core headline earnings Mar 12 ZARm Mar 13 ZARm Headline earnings 4,874 6,630 Equity-settled share scheme charges Deferred tax adjustments (38) (195) Amortisation of intangible assets 1,191 1,403 Business combination losses Mail.ru special dividend received by Tencent - (423) One-off prior year tax benefit (Tencent) - (191) Retention option expense Fair value adjustments & currency translations Core headline earnings 6,951 8,533 40

41 Contribution by associates Associates contribution 1H FY13 Company PPA IFRS Other Core HEPS ZARm results adjustments results adjustments* contribution Tencent 6,114-6, ,652 Mail.ru 3,099 (107) 2,992 (2,340) 652 Abril 94 (133) (38) (31) (69) Other (35) (32) (67) 32 (35) TOTAL 9,272 (271) 9,001 (1,801) 7,200 * Headline and core earnings adjustments similar to Naspers methodology Associates contribution to Core HEPS (ZARm) (271) (1,801) 9,272 9,001 7,200 Company results PPA adjustments IFRS results Other adjustments Core HEPS Contribution 41

42 Development spend breakdown Development spend per business division Mar 12 ZARm Mar 13 ZARm % Change Internet 1,857 3,259 75% Pay-TV % Print % Total 2,823 4,267 51% 42

43 Net finance costs Reconciliation of finance costs Mar 12 Mar 13 ZARm ZARm Interest (paid) (1,271) (1,501) Loans and overdrafts (877) (1,045) Transponder leases (132) (231) Other (262) (225) Interest received Loans and call accounts Other Other finance costs, net 174 (248) FX translation adjustments (135) (373) BEE preference dividends Total finance costs (697) (1,316) Debt US$700m 7-year bond issued Jul10: 6.375% coupon 5-year US$2bn RCF arranged Mar11: US$1.4bn drawn at Mar 2013 US$800m fixed at 4.3% all-in for 5 years Floating interest of ~2.1% on rest (1.75% + 3month LIBOR + other costs) Net finance cost Increased 89% YoY Transponders Total annual cost ~US$82m New SA agreement effective Sep12 43

44 Taxation analysis Mar 12 ZARm Mar 13 ZARm Profit before tax 5,540 9,300 Add back: Development spend 2,823 4,267 Equity results (including impairments) (3,775) (6,944) Other gains and losses 1, Acquisition gains FX gains and losses BEE preference dividends (309) (125) Adjusted profit before tax 6,602 7,845 Tax charge (2,059) (2,552) Effective rate 31% 33% 44

45 Impact of currency movements ZAR weakness boosted offshore earnings Revenue growth YoY * Trading profit growth YoY * Core earnings growth YoY 80,000 60,000 40, % +27% 76,776 71,883 16,000 12,000 8, % 14, % 13,149 10,000 8,000 6,000 4,000 2, % +11% 8,533 7,719 20,000 Reported Constant Currency 4,000 Reported Constant Currency - Reported Constant Currency * Based on economic interest, i.e. assuming equity accounted investments are proportionately consolidated Average Closing rate Currency (ZAR = 1FC) Mar 12 Mar 13 % change Mar 12 Mar 13 % change US dollar Euro Chinese Yuan/Renminbi Brazilian Real Polish Zloty Nigerian Naira

46 FX Hedging to manage risk US$ Forward Exchange Cover US$m US$ rate FY FY EUR Forward Exchange Cover EURm EUR rate Annualised net foreign input costs Pay-TV: US$367m (programming rights and leases) Print: EUR12m and US$14m (paper and ink) Hedging strategy Pay-TV: long-term commitments, cover up to 100% of rolling month net inputs Print: short-term commitments, cover maximum 12 months rolling input costs Bond/RCF: hedge interest liability to a maximum of 24 months FY FEC s Almost all FEC s qualify for hedge accounting 46

47 Capital expenditure Spending by type Mar 12 ZARm Mar 13 ZARm Land, buildings & plant Transmission equipment 626 1,468 Computer, software & network equipment Other (including vehicles, furniture) Capital expenditure 2,034 2,767 Capex/Revenue 5% 6% 47

48 Current assets and liabilities Current assets Mar 12 ZARm Mar 13 ZARm Current liabilities Mar 12 ZARm Mar 13 ZARm Inventory 1,238 1,941 Current portion of long-term debt 1,613 2,298 Programme and film rights 1,522 1,868 Provisions Trade receivables 3,296 4,121 Other receivables 2,639 3,189 Derivative financial assets Cash and deposits 9,825 15,813 Assets held for sale Trade payables 2,865 4,179 Accrued expenses and other 7,436 9,875 Tax payable Derivative financial liabilities Bank overdraft and call loans 1,034 1,423 Liabilities held for sale Total 19,241 27,427 Total 13,857 18,491 48

49 Consolidated income statement US$ Mar 12 ZARm Mar 13 ZARm Mar 12 US$m Mar 13 US$m Revenue 39,487 50,249 5,329 5,875 Operating profit 3,202 3, Finance costs (697) (1,316) (94) (154) Share of equity accounted results 3,869 9, Acquisitions and disposals (134) (47) (18) (5) Dilution profits (606) (96) (82) (11) Impairment of equity accounted investments (94) (2,057) (13) (240) Profit before taxation 5,540 9, Taxation (2,059) (2,552) (278) (298) Net profit 3,481 6, Attributable to: Naspers 2,894 6, Minorities FY13 ZAR/US$8.55(7.41) 49

50 Naspers group structure 50

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