Analyst Booklet detailed financials. For the year ended 31 March 2018

Transcription

1 Analyst Booklet detailed financials For the year ended 3 March 208

2 Important information This report contains forward-looking statements as defined in the United States Private Securities Litigation Reform Act of 995. Words such as believe, anticipate, intend, seek, will, plan, could, may, endeavor and similar expressions are intended to identify such forward-looking statements, but are not the exclusive means of identifying such statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances and should be considered in light of various important factors. 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. The key factors that could cause our actual results performance, or achievements to differ materially from those in the forward-looking statements include, among others, changes to IFRS and the interpretations, applications and practices subject thereto as they apply to past, present and future periods; ongoing and future acquisitions, changes to domestic and international business and market conditions such as exchange rate and interest rate movements; changes in the domestic and international regulatory and legislative environments; changes to domestic and international operational, social, economic and political conditions; the occurrence of labour disruptions and industrial action and the effects of both current and future litigation. We are not under any obligation to (and expressly disclaim any such obligation to) revise or update any forward-looking statements contained in this report, whether as a result of new information, future events or otherwise. We cannot give any assurance that forward-looking statements will prove to be correct and investors are cautioned not to place undue reliance on any forward-looking statements contained herein. 2

3 .Strategic review 2. Operational review Agenda 3. Financial review 4. Outlook

4 Strategic review

5 In pursuit of growth - how do we create value? Active management of assets Rigorous capital allocation Strong growth and financial returns We pursue growth and create value by building leading companies that empower people and enrich communities. We partner with founders/entrepreneurs to build platform businesses which offer services that address fundamental needs. We focus on high-growth markets. As these platforms scale, they provide strong and defensible leadership positions, which translate into healthy financials. Underpinned by our active management of assets and rigorous capital allocation, we ensure we optimise our portfolio to create long-term value for shareholders. 5

6 Managing assets and allocating capital for growth and financial returns We have a systematic approach to how we allocate our capital: We typically invest in new businesses early on, focusing on opportunities with the potential to scale globally. We often double-down on existing investments, helping them build scale and market leadership. Once we are comfortable about a winning proposition, we go all-in, driving these businesses to profitability and cash generation. We also have businesses that are mature, profitable and cash generative. In addition we have invested in a number of companies that are public. 6

7 We have delivered well on our objectives Objectives Deliver strong financials Scale classifieds (+letgo) (Letgo) Highlights Revenue up 38% (39%) YoY to US$20.bn Trading profit up 47% (52%) to US$3.4bn Core headline earnings up 72% to US$5.8 per N ordinary share Classifieds (excl. letgo) turned profitable (US$63m) and FCF positive letgo (US) achieved leadership on key metrics vs Offerup Drive payments growth Total payment value exceeded US$25.5bn, up 53% YoY Reduced trading loss by 42% on existing footprint (in local currency) Expanded credit business: invested in Kreditech and others Expand food delivery Grow VE subscribers and cut costs ifood revenue up 2% YoY to US$7m Invested in Delivery Hero (US$.3bn for 23%) and Swiggy (US$20m for 23%) Increased subscriber base by 3% to 3.5m households Revenue increased 8% (7%) and trading profit 29% (24%) Reduced costs by over US$70m, stabilised SSA losses Note: Numbers in brackets represent year-on-year growth in local currency, excluding M&A. 7

8 Operational review

9 Classifieds: clear leader in the global landscape Mobile leadership Top 3 app 36 COUNTRIES 4.4 APP RATING Scale 2 90m Monthly App Users Google play store; shopping/lifestyle categories. 2 Numbers reflect proportionate share of users of equity-accounted investments. 3 Countries with lower than 000 daily unique listers (7 in total) excluded from active country list. 62m Global footprint Monthly Net New Listings 4 Countries 3 Global leader in online classifieds, with 7 brands across 4 countries employees in 35 offices across footprint. Leading in 36 countries. Over 330m monthly users worldwide, 62m net new listings monthly. 90m app users, up 29% YoY. 9

10 Classifieds: engagement metrics reflect continued growth Average monthly unique listers (MUL),(m) 29% Average monthly paying listers (m) 30% Our teams have spent over 0 years building a top of mind classifieds business in the markets we operate. Despite our considerable size, user engagement continues to reach new levels. Monthly unique listers averaged ~22m, an increase of 29% YoY. We have been able to convert this into 2.5m monthly paying listers, up 30% YoY. Data reflects full year averages at 00% of controlled entities and proportionate share of equity-accounted investments. 0

11 Classifieds: growing far ahead of industry peers on limited monetisation OLX Group: average revenue/internet user (ARPIU) : monetisation countries (US$) % Industry peers 2 : revenue growth rates (reported currency) 4% 64% 2% 34% We continue to expand our monetisation markets. ARPIU increased 33% YoY to US$.44. Compared to peers (many generating ARPIU between US$3 US$30), this suggests significant upside potential. EBITDA margin for monetisaton countries expanded from 45% to 49%. Revenue growth in (last fiscal) was ~3x our industry peers. Our unique portfolio mix allows us to sustain high growth. FY6 EBITDA margin 45% 45% 49% Prior fiscal Industry average Most recent fiscal OLX Group OLX Group data excludes letgo. Calculated as total revenue for OLX monetisation countries (: n=4), divided by the total number of internet users in those countries. 2 Industry peers include TradeMe, Rightmove, Schibsted Classifieds, Axel Springer, Scout24. Sources: Company filings, investor reports, EIU reports and Factset.

12 Classifieds: acceleration by our European leaders MULs # of Paying listers App MAUs Financials (RUBm) % % Russia +5% % 29% MULs # Paying listers App MAUs Poland 60% +23% +20% Financials (PLNm) 2 +48% 80% MULs # of Paying listers App MAUs 6 03 Brazil 69% +7% Financials (BRLm) +20% (26) +45% ( 3) 89% Avito and Poland continue to be portfolio leaders, increasing top and bottom line growth substantially YoY. Both now generate trading margins above 50%. Brazil has emerged as one of our strongest growth markets. Increased investment to enhance service and product offerings, impacted profitability to March (the business reached break-even during the year). All 3 regions have been posting strong growth across key metrics and delivered these results off fairly high bases. Revenue Trading profit Revenue Trading profit Revenue Trading loss OLX Brazil is a 50/50 joint venture (JV) with Schibsted Media Group. 2 Financial information for Avito and OLX Brazil are reported publicly by other listed shareholders, whilst information for OLX Poland is not publicly disclosed. 2

13 Classifieds: letgo growth exceeding expectations on limited marketing US Turkey Mobile monthly active users (MAU), (m) Mobile monthly active users (MAU), (m) Jan-6 Mar-6 May-6 Jul-6 Sep-6 Nov-6 Jan-7 Mar-7 May-7 Jul-7 Sep-7 Nov-7 Jan-8 Mar-8 OfferUp letgo 20% Jan-6 Mar-6 May-6 Jul-6 Sep-6 Nov-6 Jan-7 Mar-7 May-7 Jul-7 Sep-7 Nov-7 Jan-8 Mar-8 Sahibinden letgo 24% Maintained lead against Offerup in the US, while closing the gap against Sahibinden in Turkey. Pulled back on marketing spend and focused on product improvement and user retention. US: annualised average mobile MULs +42% YoY. Started testing monetisation features with excellent results so far. Turkey: focus on product paid off, annualised average mobile MULs increased 53% YoY. Note: letgo, OfferUp & Sahibinden data from leading third-party data provider. 3

14 Classifieds: extending our business model Classic horizontal platform Vertical offerings Specialised convenient transactions Started off focusing on building classic horizontal platforms, making it easy for anyone to buy and sell almost anything and thus creating a win-win environment. Expanded into vertical offerings through brands such as Otomoto and Strada in the vehicle space, as well as Otodom and Storia in the real estate space. Currently have ~5 vertical brands across 3 countries. Extending business model by focusing on convenient transactions models that aim to further enhance the customer experience - acquired/invested in WeCashAnyCar and Expat Wheels of Dubai and the global consumerto-business (C2B) platform Frontier Car Group. Also successfully tested delivery services in a number of markets and plan to roll it out more widely. 4

15 Payments: scaling the core business, building organisational capabilities Global footprint operations in 7 markets Average daily transactions (m) API, 250 payment methods. 28% PayU transforming from a payments business to a broader fintech services business. As part of this process, invested: Core payments Credit services Remittances Other Mar7 Mar8 Total payment value (US$bn) 53% US$99m for a 37.6% stake in Kreditech, a leading technology group for digital consumer credit, to bring innovative credit services to underserved markets; US$00m for a 22.6% stake in Remitly, a technology-driven remittance business; and also added Paysense and Zest Money to extend our fintech service offering Total payments value (TPV) up 53% YoY to US$25.5bn, with over 650m transactions processed during the year. PayU India, which accounts for 47% of PayU group TPV, reported an 84% increase YoY in total payment value. Note: Digital Currency Group forms part of the Naspers Ventures portfolio. 5

16 Food delivery: leadership positions in many large geographies Global footprint - leadership position in 40 markets GMV (US$m) 65% Orders (m) 65% Increased focus on online food delivery services with 2 notable minority investments in the year: Delivery Hero: invested US$.3bn for 23% effective stake (22% fully diluted). The business continues to build its leadership across the 42+ countries where they operate (currently lead in 36); and Swiggy: Invested US$2m during and committed to another US$80m in June 208. Following this, the group will hold a 24% effective interest (23% fully diluted). Cumulative annualised GMV for the food-delivery segment increased 65% YoY. Cumulative annualised order volumes increased 65%. Delivery Hero +46% YoY ifood +6% YoY GMV is calculated in US$ using average exchange rates for respective years. Delivery Hero s financial year end is December; however data reflects the April 207 March 208 period to align with ifood and Swiggy. GMV and number of orders exclude Mr D, which is a subsidiary of Takealot. 6

17 Food delivery: ifood grew strongly across all key metrics GMV (US$m) % Orders (m) ifood, a subsidiary of Movile, is a leading online fooddelivery platform in Latin America. 6% Business continued to grow strongly across all key metrics order volume, average take rates and customer retention. Recorded order volume growth of 6% YoY. Preferred destination for food delivery in Brazil, where the number of restaurants, order numbers and GMV more than doubled YoY. Data reflects 00% of the underlying operations, irrespective of our effective interest. GMV is calculated in US$ using average exchange rates for respective years. 7

18 B2C etail: solid growth and improving economics 2 YoY organic GMV growth EBITDA as % of GMV 34% 34% 34% 57% v Note: Nominal growth: 42% () and 30% () Note: Nominal growth: 70% () and 33% () 0.3% -6.9% -0.7% -24.8% GMV in local currency, reflecting 00% of underlying businesses for the review period. Nominal growth reflects growth in US$. 2 emag Romania. emag achieved strong GMV growth in its core markets Romania, Hungary, and Bulgaria. Takealot extended leadership in SA and expanded reach outside core categories. Naspers invested an additional US$74m in April 207 to acquire a controlling stake (resulting in the consolidation of the entity), followed by another US$28m investment in Dec 207 to take the effective stake to 96% (9.2% fully diluted). Disposed of Souq in Middle East and Konga in Nigeria to improve longterm returns. Also finalised closure of Markafoni in Turkey. Announced disposal of 2.4% (.8% fully diluted) stake in Flipkart, to US-based retailer Walmart in May 208. Subject to regulatory approval, the US$2.2bn in proceeds represents an IRR of ~32%. 8

19 VE: encouraging subscriber growth, changing mix Video entertainment subscriber homes ( 000) Total % % % % FY4 FY5 FY6 SA DTH SSA DTH SSA DTT Change in subscriber mix ( 000) Premium Compact Lower-end Macroeconomic environment remained a challenge and business continued to face competition from international players. Segment nonetheless recorded good growth, adding just over m DTH and 520k DTT subscribers, to bring the total base to 3.5m households across the African continent. DTH growth in SSA continued to benefit from our value strategy, in SA growth was driven by the Access tier. DTT growth benefited from the launch of the popular GOtv Max package and the partial analogue switch-off in Zambia. Sizeable market remains at lower-end. This segment now accounts for 60% of total subscribers. The focus of our VE business remains on driving subscriber growth, investing in local content, optimising cost structures and reinvesting for the online future. 9

20 VE SA: solid all-round performance in tough macro environment SA net additions ( 000) month average H4 2H4 H5 2H5 H6 2H6 H7 2H7 H8 2H8 PVR s ( 000) ARPU (ZAR) 9% 3% Added >500k subscribers, approaching a total base of 7m households. Mass market growth trend continues, Premium tier growth is declining and Compact tier growth is starting to stabilise. Change in customer mix resulted in ARPU declining marginally from R353 to R344 year on year. PVR s have increased 9% YoY and the.4m customers at present represent an 8% penetration on Premium and 2% penetration on Compact. Strong retention and ARPU benefit. Combined Showmax Africa and DStv Digital Media into Connected video business to drive increased focus on online/ott customer offering. Successfully renewed key entertainment and sport rights, e.g. EPL, PSL and UEFA Champions League and invested ZAR5.8bn in local content (general and sport). 20

21 VE SSA: turnaround continues SSA DTH net additions ( 000) month average (32) 48 Ongoing turnaround in SSA, despite macro challenges. Active customer base for the SSA business (both DTH and DTT) as at was 6.6m households, representing 49% of the group s total subscriber base. H4 2H4 H5 2H5 H6 2H6 H7 2H7 H8 2H8 DTH PVR s ( 000) DTH ARPU (US$) 74% -2% Net DTH additions were particularly strong during 2H8, following the implementation of the next phase of our value strategy (i.e. pricing, promotions etc.). ARPU reduction is due to Naira devaluation and value strategy price downs. Removed substantial costs from the business by renegotiating international content agreements, dropping nonperforming content and reducing local football rights. 2

22 Financial review

23 financial highlights Accelerated growth in revenue and trading profit Ecommerce losses narrowing, margins improving Classifieds turned profitable and cash generative (excluding letgo) Steady results from video entertainment, sub-saharan Africa losses stabilised 5 Tencent performance contributed to healthy earnings growth 6 Strong balance sheet + healthy returns underpin our conviction to seek out further opportunities 23

24 Synopsis of financials Revenue (US$bn) Development spend (US$bn) Trading profit (US$bn),2 38% (39%) -2% (-2%) 47% (52%) Core headline earnings (US$bn) 2 Core HEPS (USc) 2 DPS (ZAR) 72% (67%) 72% 2% Results reported on an economic-interest basis, i.e. equity-accounted investments are proportionately consolidated. Numbers in brackets represent year-on-year growth in local currency, excluding M&A. 2 restated for the group s change in the calculation of trading profit and core headline earnings regarding Tencent s digital content amortisation. 24

25 Ecommerce and Tencent underpin revenue growth YoY revenue growth rate (%) Revenue by segment (US$m) Internet revenues account for 79% of group revenues (73% in ). 39% 29% 27% Naspers group Incremental revenue by segment, YoY (US$m) YoY change (%) % Ecommerce 47% 56% Social & internet plaforms 7% 36% 56% 7% % -3% 5% (477) 666 Ecommerce Social & internet platforms 7% Video entertainment (%) Media % Video entertainment Social & internet platforms (6%) Ecommerce (8%) Video entertainment (8%) Media and other (3%) Media M&A and other Forex Results reported on an economic-interest basis, i.e. equity- accounted investments are proportionately consolidated. Numbers in brackets represent year-on-year growth in local currency, excluding M&A. 38% (39%) Classifieds, B2C and food delivery contributed meaningful growth, resulting in a 9% acceleration of the ecommerce growth rate YoY (i.e. 36% vs 27% reported in the prior year). Social & internet platforms increased revenue by 56% YoY, a 9% acceleration. Tencent was the major driver, with healthy growth across all revenue streams resulting in 56% revenue growth in local currency. VE sustained revenue growth of 7% YoY, driven by a 3% growth in the subscriber base. A stronger ZAR impacted positively, but further currency weakness in Nigeria and Angola had the reverse effect. The disposal of Allegro in had a negative impact of US$327m on revenue growth. 25

26 Ecommerce growth accelerating Constant currency revenue growth by type (%) 87% 2% Ecommerce growth amounted to 36%, a 9% acceleration on the prior year. Classifieds continue to grow strongly, but off a much higher base. Revenues are trending toward the US$bn mark. Travel growth rates in the prior year benefited from both ibibo and MMT successfully scaling the hotel booking business from a very low base. 64% 62% PayU accelerated its growth to 37%, with payment volumes growing a healthy 53%. 27% 36% 35% 2% 32% 37% 36% Ecommerce Classifieds Travel Payments Etail Food delivery Results reported on an economic-interest basis, i.e. equity-accounted investments are proportionately consolidated, reflecting year-on-year growth in local currency, excluding M&A. Note: Allegro was sold in, resulting in the marketplace segment falling away. revenue growth in trave l was boosted by the launch of the India hotel segment. 2% Healthy growth in etail was underpinned by meaningful GMV growth across all our businesses. ifood, which benefited from a 6% growth in orders, was the main driver of the 2% growth in food delivery revenues. (These numbers were not affected by Delivery Hero and Swiggy, as these investments were made in and thus excluded here as M&A). 26

27 Diversified business mix ongoing shift Revenue by geography Asia (65%) South Africa (6%) Europe (0%) Rest of Africa (5%) Latin America (2%) Other (2%) Revenue by type IVAS & games (40%) Subscription (5%) Ecommerce (9%) Advertising (3%) Print, circulation & distribution (%) Technology (%) Other (%) Diversity of revenue streams reduce the risk of exposure to any one territory/currency or business model. 84% ( 80%) of revenues are now earned outside South Africa. Annuity income (i.e. subscription revenues, IVAS and gaming) accounted for 55% of revenues, down % YoY due to the negative impact of currency weakness in SSA on US$reported subscriptions revenues. Advertising revenue, which is cyclical in nature, is only 3% of total revenue. Based on economic-interest, i.e. assuming equity-accounted investments are proportionately consolidated. 27

28 Development spend on downward trend as businesses turn profitable Development spend (US$m) Incremental development spend by segment, YoY (US$m) YoY change (%) (6) () Ecommerce Video entertainment FY6 Older investments -8% -4% -7% 27% 2% (80) 6 8 M&A and Media New investments Equity accounted investments Forex -2% (-2%) % (-2%) Development spend represents trading losses of developing businesses yet to reach scale. Results reported on an economic-interest basis, i.e. equity-accounted investments are proportionately consolidated. Numbers in brackets represent year-on-year growth in local currency, excluding M&A Development spend reflects the trading losses incurred by businesses yet to reach scale. Our proportionate share of development spend of equityaccounted investments (i.e. the difference between development spend on an economic interest and consolidated basis), amounted to US$287m (US$223m in ). This number does not impact our cash flow as losses incurred by equity-accounted investments are funded by the capital already raised. Spending on new investments decreased by US$55m (3%) and is mainly related to lower spend in letgo, partially offset by investments in Delivery Hero, Swiggy, Showmax Poland and Kreditech. We also saw an % decline (US$73m) in funding of older, more established businesses, most notably an 8% reduction in classifieds spend (excluding letgo). 28

29 Consolidated development spend also trending downwards Development spend (US$m) -22% (-7%) FY6 Older investments New investments Incremental development spend by segment, YoY (US$m) YoY change (%) -8% -4% 28% -0% 2% -22% (-7%) Consolidated development spend was down 7% YoY (US$92m) as the ecommerce businesses continued to scale, resulting in improved profitability. Funding of older, more established businesses declined 8% or US$36m. Development spend for new businesses was down 22% YoY, a decrease of US$57m. Funding of DTT and Showmax Africa are no longer included in development spend. (6) () 5 (85) Ecommerce Video entertainment Media M&A Forex Numbers in brackets represent year-on-year growth in local currency, excluding M&A. 29

30 Trading profit a marked improvement on last year Incremental trading profit by segment, YoY (US$m) YoY change (%) 24% 33% 24% -00% -8% 5% Ecommerce Social & internet platforms Split by segment (US$m) Internet (89%) (6) 67 (85) 5 Video Entertainment Video entertainment (%) 47% (52%) Media M&A & other Forex Trading profit growth by segment YoY (%) 37% 52% (5%) 24% 24% (32%) 42% 33% The YoY trading profit growth rate accelerated by 5% (in local currency, excluding M&A), from 37% in the prior year to 52% this year. Meaningful reductions in losses from classifieds, payments and the travel businesses improved ecommerce s profitability. Tencent s strong operating performance, i.e. 33% YoY in local currency boosted the contribution by social & internet platforms and the group s overall trading profit. Video-entertainment s trading profit increased 24% as the SA business maintained profitability and losses in sub-saharan Africa stabilised. The disposal of Allegro in had a negative impact of US$37m on trading profit in the current year. Naspers group Ecommerce Video entertainment Social & internet platforms restated for the change in the calculation of trading profit regarding Tencent s digital content amortisation. Results reported on an economic-interest basis, i.e. equity-accounted investments are proportionately consolidated. Numbers in brackets represent year-on-year growth in local currency, excluding M&A. 30

31 Improving operating leverage across ecommerce YoY change in trading profit margins (%) 5% -5% -35% -55% -75% 6% Ecommerce 59% 3% TP Margin TP Margin Results exclude Allegro and Flipkart and are reported on an economic-interest basis. Equity-accounted investments are proportionately consolidated. 2 US$8m in corporate IT charges, which are not directly associated with payments operations, have been excluded from the trading margin. 49% 8% Classifieds Etail Travel Payments 2 (27%) Food delivery Total ecommerce trading losses reduced to US$673m, with the negative trading margin improving from -35% last year to -9% this year. Margins improved across the ecommerce segment the only exception being food delivery, where we stepped up our investment in ifood to expand into Mexico and Argentina. Classifieds accelerated revenue growth and more than doubled trading profits. The segment turned profitable (excluding letgo). Our share of MMT s losses reduced 9% YoY as the business benefited from healthy growth in gross bookings and transaction volumes. Including the new investments in Remitly and Kreditech, payments improved its negative trading margin from -37% to -9%. 3

32 Profitable ecommerce contribution now equal to VE Financial progress of profitable ecommerce entities (US$m) % (77%) % (52%) 352 The graphs reflect the performance of our current portfolio and exclude the impact of profitable businesses that have been disposed of (such as Allegro in ). Trading profit from profitable businesses increased 52% YoY, on revenue growth of 77%. emag Romania (etail) became profitable during the year, which has been a major driver of the revenue growth in profitable businesses, as well as etail being the largest revenue segment. FY6 Revenue Trading profit Results are reported on an economic-interest basis, i.e. equity-accounted investments are proportionately consolidated. Numbers in brackets represent year-on-year growth in local currency, excluding M&A. FY6 and numbers exclude revenue and trading profit associated with disposed entities, reflecting amounts on a like-for-like basis. 32

33 Classifieds: OLX turned profitable and FCF generative OLX group revenue (US$m) OLX group trading profit/(loss) (US$m) 46% (34%) (78) 8% (56%) 63 The segment (excluding letgo) turned profitable, mainly due to higher revenues and savings in marketing spend (also in our joint ventures). Revenue growth was underpinned by strong growth in Avito and European markets (led by Poland, Ukraine and Romania), as well as increased levels of monetisation. 266 (92) FY6 FY6 F7 F8 Results reported are on an economic-interest basis, i.e. equity-accounted investments are proportionately consolidated. Numbers in brackets represent YoY growth in local currency, excluding M&A. All numbers exclude letgo. FY6 results reflect pro-forma numbers, assuming the consolidation of Avito for the fullyear. 33

34 Payments: strong revenue growth and margin improvement Revenue and trading loss (US$m) 86 58% (37%) 294 Payments continue to grow and scale toward profitability. Revenue growth of 37% was driven by a 27% increase in transactions and a 53% increase in total payment volume to more than US$25bn. 40 9% (53%) Losses narrowed and negative margins narrowed from -37% to -9%. (59) (69) (56) TP Margin -42% TP Margin -37% TP Margin -9% FY6 Revenue Trading loss US$8m in corporate IT charges, which are not directly associated with payments operations, have been excluded from the trading loss above. Information is reflected on an economic-interest basis; numbers in brackets represent YoY growth in local currency, excluding M&A. 34

35 Food delivery: scaling fast and delivering topline growth Food delivery (segment results), (US$m) 23% (2%) ifood investing in further growth (US$m) 2% (2%) Food delivery trading losses increased YoY due to ifood s more aggressive marketing strategy aimed at attracting new customers and accelerating growth. Delivery Hero reported a strong set of results, growing revenues by 60%, driven by a 48% increase in order numbers YoY to 292m. (30) (6) Revenue Trading (loss)/profit Revenue Trading (loss)/profit Information is reflected on an economic-interest basis; numbers in brackets represent YoY growth in local currency, excluding M&A. 35

36 Travel: cost-saving opportunities created by the MMT/ibibo merger Revenue and trading loss (US$m) 24% (2%) % (2%) (89) (88) (6) TP Margin -22% TP Margin -98% TP Margin -72% FY6 MakeMyTrip (MMT) solidified its position as leading online travel agency in India and seized cost-saving opportunities created by the merger with ibibo last year. In May 207, Naspers contributed US$32m (40%) in a US$330m funding round to support further growth. MMT continues to focus investment on the underpenetrated high-growth online hotels segment. At 4Q (Mar) MMT reported 67m total unique visitors and 8m monthly active mobile users. Revenue Trading loss Information is reflected on an economic-interest basis; numbers in brackets represent YoY growth in local currency, excluding M&A on a like-for-like basis. Naspers incorporates MMT results on a 3-month lag basis. FY6 and reflects the ibibo results prior to the MMT/ibibo merger. 36

37 VE: subscriber growth and cost optimisation drive growth Video entertainment financials (US$m) Revenue Trading profit 8% (7%) % (24%) FY6 Capital expenditure (US$m) Programming and production costs (US$m) 5% % Financials impacted by local currency pricing vs. US$ input costs. The segment reported 8% revenue growth (7% in local currency) with higher subscription revenues due to higher subscriber base and annual price increases. Overall profitability improved 29% (24% in local currency) as revenue growth was supplemented by cost optimisation initiatives. The decline in capex is due to the business being at the end of the DTT investment cycle and our new customer care and billing platforms being largely completed in the prior year. Programming costs largely increased due to additional investment in local content. FY6 FY6 Numbers in brackets represent YoY growth in local currency. 37

38 VE: solid performance from SA, despite challenges SSA losses stabilised South Africa ZAR strengthened vs US$ FY6-25% -% 8% which, together with subscriber growth, boosted results (US$m) 8% (3%) % (6%) FY6 Revenue Trading profit Higher SA subscriber revenue (9% sub growth, ~3% price hikes) and content savings, boosted by a stronger ZAR, drove profitability. The SA business generated US$522m in free cash flow. 3% profit growth organically offset by FX impact. Sub-Saharan Africa Naira continues to weaken FY6-4% -44% -25% Reflecting change in average rates for the reporting periods... but control and renewed sub growth led to some stability (US$m) % (0%) % (+3%) (38) (358) (364) FY6 Revenue Trading loss Savings from the elimination of nonperforming content also contributed to losses stabilising. Trapped cash reduced from US$289m in to US$3m (mainly Angola and Zimbabwe) due to liquidity improvements in Nigeria. 38

39 Social & internet platforms: healthy contributions, investing for growth Tencent revenue (RMBm) 56% Mail.ru revenue (RUBm) 2 34% Tencent delivered revenue of RMB238bn which translated into topline growth of 56% YoY. Growth was across all revenue segments Growth in Tencent s operating profit was lower at 4% YoY due to higher channel costs in smart phone games and investment in content Tencent operating profit (RMBm) % Reflects 00% of Jan-Dec 207 (), detailed results available at FX rate: US$/RMB ( ). Operating profit reported on a non-gaap basis Mail.ru EBITDA (RUBm) % Reflects 00% of Jan-Dec 207 () results on a non-gaap basis; detailed results available at FX rate: US$/RUR ( ). Note: Financial information as per financial years ending December, which differs from the Naspers reporting period. Equity-accounted investments are included on a 3-month lag basis. We trimmed our Tencent holding by selling a 2% stake in March this year for proceeds of US$9.8bn. This is the first time, since our initial investment in 200, that we have sold any shares. Mail.ru achieved organic revenue growth of 8% YoY, mainly driven by growth in online-advertising and massively multipiplayer online (MMO) games, as well as in online food delivery (Delivery Club). Trading profit growth was affected by investments to grow Delivery Club, Youla and Beepcar. 39

40 Segmental detail Revenue EBITDA Trading profit % % % US$'m US$'m Change US$'m US$'m Change US$'m US$'m Change Internet % % % Social and internet platforms % % % - Tencent % % % - Mail.ru % % % Ecommerce % (65) (682) 0% (673) (73) -8% - Etail % (248) (258) 4% (270) (28) 4% - Travel >00% (59) (87) 32% (6) (88) 3% - Marketplaces % % % - Payments % (60) (66) 9% (64) (69) 7% - Classifieds % (99) (39) 69% (4) (328) 65% - Food delivery >00% (20) 5 >-00% (30) 5 >-00% - Other % (29) (03) -25% (34) (07) -25% Video entertainment % % % - South Africa % % % - Sub-Saharan Africa % (27) (260) -4% (364) (358) -2% - Corporate and other 2 (440) (462) 5% (08) (82) -32% (8) (93) -27% Media % % % Corporate and intersegmental (8) (48) -58% (22) (4) -57% (22) (4) -57% Economic interest % % % Less: Equity-accounted investments (3 437) (8 464) -59% (3 739) (2 756) -36% (3 444) (2 536) -36% Consolidated % >00% (4) (24) 8% EBITDA and trading profit has been adjusted to include the amortisation expenses regarding Tencent s digital content business. 2 Includes intergroup eliminations for content and other sales between South Africa and sub-saharan Africa, as well as our technology and Showmax. 40

41 Free cash inflow: increased profitability converts into cash generation Consolidated trading profit from profitable ecommerce businesses (US$m) Internet 53% Other Payments Classifieds Tencent dividend FCF defined as EBITDA less adjustments for non-cash items, working capital, taxation, capital expenditure, capital leases repaid and investment income. Allegro excluded from all comparatives % Internet 42% Sources of free cash inflow (US$'m) VE SA Ecommerce cash generation is improving - classifieds and payments have replaced Allegro s contribution. Classifieds (excluding letgo) is cash generative in aggregate and generated 77% more free cash than last year. Stable free cash flow (FCF) from South African video entertainment has been impacted by changes in working capital (mainly prepaid sports content rights renewals), but this will reverse next year. We receive increasing dividends from Tencent YoY. In the Tencent dividend increased 29% YoY. One of our key focus areas is to further accelerate the path to profitability and cash generation in our core segments. 4

42 FCF from operations offset by changes in working capital US$m EBITDA Working capital 4 (255) Non-cash items 8 38 Cash generated from operations Capital expenditure (73) (39) Finance leases (06) (04) Taxation (333) (39) Investment income Free cash flow (FCF) (25) (242) FCF breakdown (US$m) Free cash flow (FCF) positively impacted by: US$268m increase in cash from operations (excluding working capital) is mainly due to a higher contribution from profitable businesses; US$34m reduction in capex; and Dividend from Tencent increasing by US$56m to US$247m. Offset by working capital outflows: From video entertainment due to investment in set-top box inventory and pre-payments regarding sports content rights renewals; and Investment in etail inventory ahead of seasonal sales events. (25) 268 (42) (58) (29) 58 (242) Disposal of Allegro in also impacted negatively, reducing cash from operations in the current period by US$92m. Excluding the negative impact of VE in SSA, FCF would have been positive. Cash from ops Working capital Tax paid Capex and leases Investment income 42

43 Holding company sources of cash and commitments US$m Cash remitted by Holdco: Tencent dividend VE segment dividend Allegro 60 - Classifieds portfolio Total inflows Commitments: Holdco operating costs (97) (0) Available for interest/dividends Holdco interest cost (6 months) The inflows increased by 5%, with the loss of cash from Allegro, following its disposal, replaced by cash inflows from classifieds. The loan to value ratio was stable at 3%. Interest cover Loan to value (Debt: marketable securities) 3% 3% ZAR component reflected at same FX rate that forward cover entered into to cover interest payments for next 2 months from this dividend. 43

44 Recent M&A activity Acquisition spend over time (US$m) Investments FY9 YTD (US$m) Exits (US$m) Total Trim down (US$m) 2 Optimisation of the portfolio happens on an ongoing basis. In we invested US$2.2bn in new opportunities: Delivery Hero (US$.3bn) Takealot (US$202m) MakeMyTrip (US$55m) Swiggy (US$2m) Remitly (US$00m) Kreditech (US$99m) Flipkart (US$7m) Autotrader (US$4m) Other (US$36m) FY6 Total Total We received US$0bn from disposals in, made up primarily of proceeds from the trim down of our Tencent stake and the Souq disposal. The sale of our.8% fully-diluted stake in Flipkart for US$2.2bn was announced in May 208 and is subject to regulatory approval; the transaction is expected to be concluded in FY9. 2 Tencent stake was reduced from 33.2% to 3.2% in March

45 Internal rate of return (IRR) well above cost of capital All internet investments excluding Tencent (FY08 ) (US$bn) 0.5 Total invested capital 7% IRR Current internet portfolio excluding Tencent (US$bn) 2 2.2X 2.2X 23.0 Market & analyst valuation 8.5 Invested capital current portfolio 23% IRR 9.0 Market & analyst valuation IRR calculated using market and analyst valuations for all internet assets (excluding Tencent) including disposed and discontinued businesses Market and analyst valuations for current internet portfolio (excluding Tencent as at 30 September 207). If you consider all internet investments (excluding Tencent) since 2008 against current market valuations, we generated an IRR of 7%. (Including Tencent close to 50%). If you apply the same approach to existing assets, the overall return is 23% - significantly ahead of the Nasdaq and many of our peers. Considering our cost of capital of ~2%, we have essentially doubled our money over a relatively short period. This track record (including 32% Flipkart IRR) and our disciplined approach to capital allocation, provides us with confidence that we can generate great returns for shareholders by investing in growth opportunities. 45

46 Summarised income statement US$m 2 Revenue Less: Equity-accounted investments (8 464) (3 437) Consolidated revenue Trading profit (24) (4) Trading margin -4% -% Net finance costs (485) (246) Re-measurement of put options liabilities (622) (252) Share of equity-accounted results Gains/(losses) on acquisitions and disposals 2 69 (93) Dilution (losses)/gains on equity-accounted investments (9) 9 26 Impairments (58) (89) Taxation (244) (360) Net profit Core headline earnings Core headline EPS (US$) Based on economic-interest, i.e. equity-accounted investments are proportionately consolidated. 2 results restated for the group s change in accounting policy regarding put option liabilities and the change in the calculation for trading profit and core headline earnings regarding Tencent s digital content amortisation. Increase of US$ 448m in share of equity accounted investments: Mainly attributable to Tencent (US$3 66m), offset by losses from new investments including MMT, Delivery Hero and Kreditech. (Losses)/gains on acquisitions and disposals: Loss on disposal of Novus (US$45m) Gain on disposal of Souq (US$89m). Impairments include the closure of the classifieds JV in Bangladesh, and losses regarding the classifieds JV in Thailand and various other write-offs. Tax paid is up YoY due to increased profitability, particularly in the videoentertainment segment. 46

47 Finance costs down YoY US$m Interest paid (278) (267) Loans and overdrafts (98) (96) Transponder leases (46) (5) Other (34) (20) Interest received Loans and bank accounts Other 4 4 Other finance costs, net (277) (67) Translation of foreign current assets and liabilities (243) (2) Translation of transponder leases Translation of forward exchange contracts (FECs) and cross-currency interest rate swaps (76) (53) Re-measurement of put option liabilities (622) (252) Interest paid and received Net finance costs on borrowings (net of interest on loans and bank accounts) was down 4% to US$22m benefiting from lower utilisation of credit facilities and the 4.85% coupon achieved on the new US$ bond issued in July 207. The RCF facility of US$2.5bn was unutilised at 3 Mar 208. Other finance costs Translation of foreign assets and liabilities primarily relates to intergroup loans. Re-measurement of written put option liabilities The change in accounting policy for put options has significantly impacted other finance costs. Debt US$bn 7yr bond issued July 203 (6% coupon). US$.2bn 0yr bond issued July 205 (5.5% coupon). US$bn 0yr bond issued July 207 (4.85% coupon) - proceeds were used to repay the US$700m bond which matured in July 207, with the remaining proceeds to be used for general corporate purposes, including M&A. Total finance costs ( 07) (498) has been restated for the group s change in accounting policy regarding put option liabilities. 47

48 Contribution by associates and joint ventures (US$m) Company results PPA adjustments IFRS results Other adjustments Core HEPS contribution Tencent (328) Mail.ru 2 (3) MakeMyTrip (97) (6) (03) 27 (76) Delivery Hero (28) (3) (3) 0 (2) Other (206) (8) (24) 27 (87) Total (20) (236) 3 04 FX conversion rates: Tencent - US$/RMB (6.7448); Mail.ru US$/RUB ( ) Equity-accounted investments contribution to core headline earnings (US$m) (20) (236) Associate and joint venture contributions (US$m) 692 Equity accounted results include, amongst others, investments in Tencent, Mail.ru, MMT, Delivery Hero and Flipkart. Other adjustments relate to headline and core headline earnings (COHE) adjustments similar to Naspers methodology. These include: - Equity-settled share-based payments - Fair-value adjustments and forex - Profit/losses on disposals of non-current assets - Impairments - Gains/losses on acquisitions and disposals - Amortisation charges on intangible assets related to business combinations Company results PPA adjustments IFRS results Other adjustments 3 04 Core HEPS Contribution FY 6 FY 7 FY 8 Once-off adjustments Normal contribution Once-off gains relate primarily to business combination-related gains/losses recognised by associates and joint ventures. The growth in is primarily driven by Tencent, which contributed US$3 66m (of which US$692m relates to gains on mergers and acquisitions and is therefore reflected as a once-off adjustment). 48

49 Core headline earnings growing strongly Trend in core headline earnings per share (US$) CAGR +45% FY6 Incremental core headline earnings drivers, YoY (US$m) 72% Core headline earnings (which excludes onceoff and non-operating items such as amortisation of intangible assets recognised in business combinations, etc.), is not defined under IFRS, but is aimed at providing a useful measure of the group s operating performance. In we changed our methodology for calculating this metric by including the cost of content amortisation relating to Tencent s digital content business, which has been growing rapidly in recent years. We believe this better reflects the true operating expenses of the group. 454 (40) 948 Forex Equity accounted investments 73 (5) 34 (57) Consolidated trading profit Minorities Net interest cost Taxation Core headline earnings per share increased 72% YoY, benefiting from a: - 22% reduction in development spend, and - 45% increase in income from associates. Adjustments to reported earnings to arrive at core headline earnings are also applied to the contribution from equity-accounted investments. These adjustments have tax and non-controlling interest effects that are similarly adjusted for in arriving at core headline earnings. Prior year results have been restated for the group s change in the calculation of trading profit and core headline earnings related to Tencent s digital content amortisation. 49

50 Core headline earnings reconciliation US$m Headline earnings Equity-settled share-based payment expenses Amortisation of other intangible assets Business combination losses Retention option expense 8 Fair-value adjustments & currency translation differences Core headline earnings restated for the change in the calculation for core headline earnings related to Tencent s digital content amortisation. Main contributor of COHE growth was Tencent, contributing US$3.3bn (+47% YoY) Decreased consolidated trading losses (down 8% YoY) fuelled growth. The above was partially offset by higher losses of associates and joint ventures, including MMT, Delivery Hero, Swiggy and Kreditech. Fair-value adjustments and currency translation difference were impacted by the re-measurement of put options and losses on the cross currency interest rate swap. The diluted earnings, diluted headline earnings and diluted core headline earnings figures presented include a decrease of US$49m (: US$24m) relating to the future dilutive impact of potential ordinary shares issued by equity-accounted investees. 50

51 Tencent contribution to core headline earnings Tencent FY6 (Dec) (RMBm) Naspers s share (US$m) Tencent (Dec) (RMBm) Naspers s share (US$m) Tencent profit attributable to equity holders Adjustments to core: (6 360) (328) - Impairment of investments Share-based payments Fair-value adjustments and gains and losses on acquisitions and disposals (7 770) (393) (8 05) (96) - Losses/(profit) on disposals of non-current assets Amortisation charges Tencent s contribution to Naspers core headline earnings % of Tencent Holdings Limited s results as reported in its annual reports. 2 All share-based payments adjusted for as the split between equity and cash-settled awards is not always available. 3 amortisation adjustment restated for the change in the treatment of Tencent s digital content amortisation. 5

52 Balance sheet reinforced with cash to pursue future growth opportunities US$m Debt : (offshore US$3.2bn) (2 898) (3 26) Cash: (South Africa US$398m) Closing net cash Gearing 2-9% -32% Interest on loans and overdraft (98) (96) Excludes satellite lease liabilities (US$.2bn) and non-interest bearing debt (US$207m). 2 restated for the group s change in accounting policy for put option liabilities. The US$9.8bn raised from the recent trim of our Tencent stake has resulted in a very strong balance sheet at yearend. We intend using the cash available to settle put options and to fund our growth ambitions. Group debt includes US$3.2bn in US$-denominated bonds. Debt covenants related to RCF: - Net debt/adjusted EBITDA <2.75x - Interest cover >4.5x Group net consolidated cash/(debt) (US$m) 8 52 US$398m of total cash is held in ZAR. The remainder (96%) of the total cash (US$0.96bn) is held offshore, mainly in US Dollar, EURO, Polish Zloty, Brazilian Real and Indian Rupee. ( 23) 05 FY6 52

53 Debt maturity profile and debt position Debt maturity profile (US$m) Bond US$ 000m Group RCF US$2 500m Bond US$ 200m CY9 CY20 CY2-22 CY23 CY25 CY27 Split of cash reserves (US$m) 398 South Africa Offshore (US$ & EUR) Split of debt obligations (US$m) Bond US$ 000m Offshore (US$ & EUR) The group amended its RCF in April 208 which extended the facility for a further five year period, maturing in April Apart from extending the maturity date, the facility was amended to be more in line with the group s current credit profile. It allows more flexibility to leverage the significant value of our marketable securities to raise additional financing and the financial covenants related to MultiChoice South Africa have been removed. The US$2.5bn RCF facility was undrawn at 3 March

54 Current assets and liabilities Current assets (US$m) Current liabilities (US$m) Inventory Current portion of long-term debt Programme and film rights Trade payables Trade receivables Accrued expenses and other Other receivables Tax payable 7 3 Derivative financial assets 6 Derivative financial liabilities 9 29 Cash and deposits Bank overdraft and call loans 4 Assets held for sale Liabilities held for sale 70 - Total Total has been restated for the group s change in accounting policy for put option liabilities. The increase in other receivables relates largely to video-entertainment content prepayments and an increase in merchant receivables at PayU. Cash and deposits have increased largely due to the proceeds of US$9.8bn received from the trim down of the Tencent investment. Souq and Novus were reported as held for sale in. Subsequently, Souq was disposed of and Novus unbundled in the current year. The current portion of long-term debt decreased by US$635m, primarily due to the repayment of the 207 bond (US$700m) on maturity in July 207. Following the change in the group s accounting policy, put option liabilities of US$.5bn (: US$50m) were included in accrued expenses and other current liabilities. 54

55 Capital expenditure US$m Land, buildings & manufacturing equipment Transmission equipment Computers, software & network equipment Split by business Maintenance capex expected to change as the business evolves. Current estimates for maintenance capex are: - Media24 <ZAR00m - Ecommerce ~US$50m - Video entertainment ~ZARbn Other (including vehicles and furniture) Video Entertainment (45%) Capital expenditure Capex/Revenue 3% 2% Ecommerce (52%) Media (3%) 55

56 FX exposure: hedging US$ FX Cover US$m ZAR rate 2 months out months out Open FEC positions Video entertainment: US$704m and 69m (programming rights and leases). Corporate: US$44m (Bond/RCF interest hedge). Hedging strategy FECs not viable outside of SA, thus exposure in rest of Africa mostly not hedged. Video entertainment: cover 00% of net SA exposure under 8 months; up to 00% between 8-24 months forward. EUR FX Cover EURm ZAR rate 2 months out months out Almost all FEC s qualify for hedge accounting. Video entertainment currency dynamics Pricing in local currency. ~40% of input costs in US$. We cover up to 00% of net SA exposure 8-24 months forward. We utilise mechanisms in SSA to hedge where possible. 56

57 APPENDIX

58 Group structure Global platform operator Classifieds B2C Payments Internet Naspers Ventures Social & internet platforms Video entertainment Media 00% 79.3% 97.6% Food Ventures 3.2% 80% 85% 7.2% 96.% 37.6% 77.4% 24.5% 28.4% 5.8% 43.% % 60.7% 2.% 00% 73.4% 2 2.4% % 2.% 2.9% 3.5% 80% 34.% 20.0% 80% 80% 5 ) OLX owns 50% of operations in Brazil and 40.5% of Indonesia. 7.5% 2) Our effective interest in letgo USA (B.V) is 47.2% held through Ambatana Holdings. 3) MMYT is listed on the Nasdaq stock exchange. 4) We announced the disposal of our 2.4% (fully diluted.2%) stake in Flipkart in May 208. The transaction is subject to regulatory approval, expected to close in FY9. 5) Showmax SA is held 80%, other Showmax operations are held 00%. 6) In June 208, the group committed to an investment of US$80m in Swiggy. Following this investment, the group will hold a 24% effective interest (23% fully diluted). *Organogram depicts effective percentage holdings in major entities as at 3 March % 58

59 Glossary of terms ARPU: Average revenue per user API: Application programming interface ARPIU: Average revenue per internet user B2C: Business to consumer CAGR: Cumulative annual growth rate COHE: Core headline earnings DPS: Dividend per share DTH: Direct-to-Home DTT: Digital terrestrial television EPS: Earnings per share FCF: Free cash flow FX: Foreign exchange GMV: Gross merchandise value IRR: Internal rate of return M&A: Mergers and acquisitions MAU: Monthly active user MUL: Monthly unique lister RPIU: Revenue per internet user PVR: Personal video recorder SSA: Sub-Saharan Africa SVOD: Subscription video-on-demand TP: Trading profit TPV: Total payment value VE: Video entertainment 59

60 THANK YOU Meloy Horn