Financial results presentation. For the six months ended 30 September 2017

Transcription

1 Financial results presentation For the six months ended 30 September 2017

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 1. Operations 2. Financials Agenda 3. Outlook 4. Appendix

4 OPERATIONS

5 1H FY18 operational highlights 1 Classifieds: strong traction across portfolio 2 B2C: local market-leadership positions, improving unit economics 3 Payments: continue to scale organically and through M&A 4 Food delivery: strengthened presence in fast-growing segment 5 VE: solid performance by SA, stabilised business in SSA 5

6 Classifieds: strong traction across portfolio MULs (m)* 21% App MAU (m) * 30% H FY17 1H FY18 1H FY17 1H FY18 * Data reflects full year averages at 100% of controlled entities and a proportionate share of equity-accounted investments. 6

7 Classifieds: increased revenue/user & margin expansion OLX: revenue/internet user - monetisation countries 34% EBITDA margins: expanding, but room to be best in class (OLX monetisation countries only)* 66% % 60% FY16 FY17 FY18E 54% # of Countries Margin % % 45% 54% 40% 52% * Sources: Company filings, investor reports, EIU reports and Factset, FX rates converted based on year average. 7

8 Apr-14 Aug-14 Dec-14 Apr-15 Aug-15 Dec-15 Apr-16 Aug-16 Dec-16 Apr-17 Aug-17 Classifieds: Avito shows consistent growth Key growth metrics Avg. 1H17 vs. 1H18 Buyers and sellers in apps (Apr 14 = 100) 62x # of Paying Listers +16% 57x App MAUs +32% MULs +42% Revenue (RUBbn)* 34% Adjusted EBITDA (RUBbn)* 44% FY14 FY15 FY16 9m FY16 9m FY17 FY14 FY15 FY16 9m FY16 9m FY17 * Financial information as per the Avito financial year ending December, which differs from the Naspers reporting period. Adjusted EBITDA reflects net profit plus depreciation and amortisation expenses, share-based compensation expense, finance costs (including fair value adjustments in respect of derivative under current office lease agreement) and income tax expense less finance income and expenses. 8

9 Classifieds: Poland exceeding expectations Key growth metrics Avg. 1H17 vs. 1H18 Revenue split (PLNm) (indexed) MULs +24% 50% App MAUs +38% # of Paying Listers +133% FY16 FY17 1H FY17 1H FY18 YoY growth in revenue (indexed) Revenue split (PLN) Real Estate Vehicles Horiztonal +31% +47% +99% Advertising C2C Goods Jobs/Services Property Cars Note: Vehicles and real estate revenues include revenues from those categories on the OLX branded platform. 1H18 9

10 Classifieds: early monetisation in Brazil, plenty of runway OLX Brazil revenue (BRLm) 88% Key Market Insights 4 th Largest Internet Base Globally 1H FY17 OLX Brazil trading loss (BRLm) 1H FY17 1H FY18 66% 1H FY18 140m users Top 10 Private Consumption Globally >US$1bn per annum Young, Mobile First Demographic 65% population < 40 yrs *Financials reflect 100% ownership, Naspers owns 50% of OLX Brazil Source: Euromonitor online database 10

11 Classifieds: letgo USA USA now also overtook Offerup in mobile minutes Monthly Minutes Spent (Mobile App) Mobile monthly active users (Mobile MAUs) 120% 19% 106% 81% Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Close5 letgo 5Miles Offerup Letgo as % of OfferUp Close5 letgo 5Miles OfferUp Letgo as % of OfferUp Source: Leading third-party data provider Source: Leading third-party data provider 11

12 B2C etail: strong GMV growth and improving unit economics B2C etail* segment GMV (US$m) YoY growth in GMV (US$m) 40% emag 35% Flipkart 43% 746 Takealot 72% 554 B2C etail segment EBITDA as % of GMV 1H FY16 1H FY17 1H FY18-11% -9% 1H FY16 1H FY17 1H FY18-19% *GMV presented on an economic interest basis, i.e. equity-accounted investments are proportionately consolidated. We adjust historic data to reflect our shareholding as at 30 Sept 2017, for comparative purposes. 12

13 Payments: continuing to scale organically and through M&A Scaling rapidly Strong growth Average daily transactions (m) Select investments 86% (63%) ~US$120m investment Provides AI-based credit Sep 16 Sep 17 Revenue growth (US$m) 52% (36%) Operations across 17 markets >300,000 merchants, 1 integration layer Many large global merchants Global reach, but deep local presence US$100m investment Digital remittance leader 1HFY17 1HFY18 * Year-on-year trends affected by the acquisition of Citrus Pay in November 2016 and Kreditech in May 2017, numbers in brackets represent organic growth excluding these transactions and fx. The Kreditech investment included cash of US$99m and committed loan funding, for a total transaction value of ~US$120m. 13

14 Online food delivery: highly attractive opportunity Online food delivery footprint* ifood investing in further growth (US$m) (7) FY16 FY17 1H FY17 1H FY18 (2) *Includes Naspers subsidiaries and online food delivery associates Revenue Trading profit Delivery Hero strong growth in 3Q % 48% 64% M FY16 9M FY17 9M FY16 9M FY17 9M FY16 9M FY17 Orders (m) GMV (EURm) Revenue (EURm) * Company data, detailed results available at 14

15 Video entertainment: solid subscriber growth Video-entertainment subscriber homes ( 000) Total 7,259 8,402 10,234 11,002 12, % % % Subscriber mix ( 000) H FY17 1H FY18 18% 15% 4,699 5,174 5,563 6, % 6,636 30% 27% 52% 58% 1H FY14 1H FY15 1H FY16 1H FY17 1H FY18 SA DTH SSA DTH SSA DTT 1H FY17 1H FY18 Premium Compact Lower-end 15

16 Video entertainment: positioning for the future South-Africa Sub-Sahara SVOD/online opportunity + Mass market growth continuing ARPU relatively stable at ZAR347 PVR penetration 20% of base Subscriber growth recovering ARPU now US$24 due to fx, sub mix Zambia commenced ASO Combined Showmax with DStvNow Strong, early market position in SA Poland showing very good traction PVR s ( 000) 8% Subscriber growth ( 000) +6% +13% Showmax: subscriber base since launch H FY17 1H FY18 1HFY16 1H FY17 1H FY18 16

17 FINANCIALS

18 1H FY18 financial highlights 1 Strong growth in revenue and core earnings 2 Development spend trending down 3 Ecommerce: topline growth accelerated, reduced losses 4 Classifieds: turned profitable (excluding letgo) 5 Healthy boost from Tencent 6 Balance sheet strong, current business plan fully funded 18

19 Synopsis of financials Revenue* (US$m) Development spend* (US$m) 33% (39%) -5% (-6%) H FY17 1H FY18 1H FY17 1H FY18 Trading profit* (US$m) Core HEPS (USc) 40% (52%) 65% H FY17 1H FY18 1H FY17 1H FY18 *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. 19

20 Ecommerce and Tencent fuel robust revenue growth Revenue* by segment (US$m) Incremental revenue* by segment, YoY (US$m) YoY change (%) 38% 56% 7% 4% 0% 5% 33% (39%) 405 1, (277) 28 9,021 6,788 Ecommerce (18%) SNS (59%) Video entertainment (20%) 1H FY17 Ecommerce SNS Video entertainment Media M&A and other Forex 1H FY18 Media & other (3%) *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. SNS includes Tencent and Mail.ru. 20

21 Ecommerce growth accelerating Constant currency revenue growth by type* 186% 180% 90% 135% 60% 76% 75% 30% 0% 38% 38% 37% 36% 29% 24% 24% 16% Ecommerce Classifieds etail Payments Food delivery Travel 1H FY17 1H FY18 *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 FY17, resulting in the marketplace segment falling away. 1HFY17 revenue growth in Travel was boosted by the launch of the India hotel segment. 21

22 Development spend lower in absolute terms Development spend YoY (US$m) * % (-6%) FY15 FY16 FY17 1H FY17 1H FY18 Older investments New investments * Development spend consists of trading losses incurred by developing businesses that have 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. 22

23 Trading profit boosted by Tencent and reduced ecommerce losses Incremental trading profit by segment, YoY (US$m)* 38% 6% 43% 3% 0% 7% 2% 40% (52%) (41) (103) (29) H FY17 Ecommerce New bets** SNS Video entertainment Media M&A & other Forex 1H FY18 * 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. ** Includes new bets within ecommerce, excludes Showmax which is included in video entertainment. 23

24 Classifieds and payments drive profitability in ecommerce Financial progress of profitable entities* (US$m) % (36%) % (52%) 170 FY16 FY17 1H FY17 1H FY18 Revenue Trading profit Contribution from disposed entities * Information is reflected on an economic-interest basis; numbers in brackets represent YoY growth in local currency, excluding M&A, on a normalised basis (i.e. accounting for changes in shareholding). 1HFY17 numbers exclude US$205m in revenue and US$105m in trading profit associated with disposed entities. 24

25 Classifieds now profitable (excluding letgo) OLX Group revenue (US$m) OLX Group trading profit/(loss) (US$m) Split in OLX Group trading profit/(loss) (US$m) % 1HFY17 1HFY % (38%) 288 (286) (192) (78) (28) % 214 (135) (95) FY15 FY16 FY17 1H FY17 1H FY18 FY15 FY16 FY17 1H FY17 1H FY18 Profitable entities Loss-making entities *Information is reflected on an economic-interest basis, all numbers exclude letgo. Numbers in brackets represent year-on-year growth in local currency, excluding M&A. FX contributed 9% to nominal revenue growth in 1HFY18. Profitable entities reflect businesses that reported a trading profit for the six-months ended 30 September. 25

26 Video entertainment: steady profitability Video entertainment (VE) financials (US$m) 8% % 1H FY H FY18 Revenue Trading profit Programming and production costs (US$m) Capital expenditure (US$m) 5% % 17 1H FY17 1H FY18 1H FY17 1H FY18 26

27 Sub-Saharan Africa South Africa Video entertainment: solid results from SA, SSA stabilised ZAR* strengthened vs US$ FY16 FY17 1H FY18 which, together with sub growth, boosted results (US$m) 10% 9% % -1% % 1H FY17 Revenue Trading profit 1H FY18 Naira* continues to weaken FY16 FY17 1H FY18-14%... but cost controls and renewed sub growth led to some stability (US$m) % -44% -33% -12% (103) (115) 1H FY17 1H FY18 *Reflecting change in average rates for the reporting periods Revenue Trading profit 27

28 Associates: healthy contribution from Tencent and Mail.ru Tencent operating profit (RMBm)* Mail.ru EBITDA* (RUBm) CAGR +38% % CAGR +3% % M FY16 9M FY17 *Reflects 100% of Jan-Sep 2017 (9M FY17) results on a non-gaap basis; detailed results available at Tencent market cap (US$bn) M FY16 9M FY17 * Reflects 100% of Jan-Sep 2017 (9M FY17) results on a non-gaap basis; detailed results available at Mail.ru market cap (US$bn) FY15 FY16 FY17 20 Nov 2017 FY15 FY16 FY17 20 Nov 2017 Note: Financial information as per financial years ending December, which differs from the Naspers reporting period. Equity accounted investments is included on a 3-month lagged basis. FY data as at 31 March. 28

29 FCF: increased cash from operations offset by change in working capital Free cash flow (FCF) breakdown (US$m) (1) 42 (96) (239) H FY17 Cash from operations Working capital* Capex Dividends received Other 1H FY18 *Working capital affected by investment in decoder inventory and pre-payments of sports rights. 29

30 M&A activity Acquisition spend over time (US$m) 1,495 Announced after half year-end Investments 420 1,005 US$775m US$100m Total US$36m US$911m FY15 FY16 FY17 1H FY17 1H FY18 30

31 Balance sheet strong, current business plans fully funded US$m FY17 1H FY18 Group net cash / (consolidated debt) (US$m) Debt*: (offshore US$3.2bn) (2,898) (3,305) Cash: (South Africa US$272m) 4,003 3,165 (140) Closing net cash / (debt) 1,105 (140) (1 213) Gearing -7% 1% (1 994) Interest on loans and overdrafts (74) (54) FY15 FY16 FY17 1H FY18 * Excludes satellite lease liabilities (US$1.2bn) and non-interest bearing debt (US$207m). 31

32 OUTLOOK

33 Outlook 1 Continue to drive scale across all segments 2 Accelerate path to profitability for ecommerce 3 Consistently drive cost reduction and margin improvement 4 Selectively invest in emerging growth opportunities 5 Set up application of AI/ML in all our businesses 33

34 APPENDIX

35 Summarised income statement US$m 1H FY17 1H FY18 Revenue* 6,788 9,021 Less: Equity-accounted investments (3,830) (5,914) Consolidated revenue 2,958 3,107 Trading profit Trading margin 2% 2% Net finance costs (165) (125) Share of equity-accounted results 912 1,447 Gains on acquisitions and disposals 39 (51) Impairments (28) (37) Taxation (144) (148) Net profit 541 1,076 Core headline earnings 914 1,510 Core headline EPS (US$) *Based on economic-interest, i.e. equity-accounted investments are proportionately consolidated. 35

36 Group structure 1) OLX owns 50% of operations in Brazil and 40.5% of Indonesia 2) Our effective interest in letgo USA (B.V) is 47.1% held through Ambatana Holdings 3) MMYT listed on the Nasdaq stock exchange; fully diluted holding 40% 4) Showmax SA is held 80%, other Showmax operations are held 100% * Organogram depicts effective percentage holdings in major entities. 36

37 Glossary of terms AI: Artificial intelligence ARPU: Average revenue per user B2C: Business to consumer C2C: Consumer 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 M&A: Mergers and acquisitions MAU: Monthly active user ML: Machine learning MUL: Monthly unique lister RPIU: Revenue per internet user PVR: Personal video recorder SSA: Sub-Saharan Africa SNS: Social network services SVOD: Subscription video-on-demand TPV: Total payment value VE: Video entertainment 37

38 THANK YOU Meloy Horn