Financial results presentation For the six months ended 30 September - PowerPoint PPT Presentation

Financial results presentation For the six months ended 30 September 2016

Important information This presentation contains forward-looking statements as defined in the United States Private Securities Litigation Reform Act of 1995. 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

STRATEGIC OVERVIEW

1H FY17 Overview: continue building platforms to optimise returns TARGET TRANSFORM LEAD IN OPTIMISE HIGH-GROWTH PURSUE SCALE FURTHER INTO ECOMMERCE RETURNS BUSINESS MODELS MOBILE 4

Target high-growth business models Monthly unique listers - USA PSP revenue growth - India Number of orders - Brazil 139% 71% 178% Mar 16 Sep 16 1H FY16 1H FY17 1H FY16 1H FY17 Mobile classifieds Payments Food delivery Source: Company data 5

Pursue scale: merging to create a leading Indian travel position + Key terms Key benefits • • Increased operating scale MMYT shareholders – 60% (Ctrip 10%) • • Accelerated tech innovation Ibibo shareholders – 40% • • Potential value creation from synergies Working capital contribution by Naspers • • Strengthened depth of management Subject to regulatory approvals • Closing by end Jan 2017 34.1m 34 9. 9.7m 6.6m 6. 17 17.5m 45% 45% Total transactions (1) Air (1) Hotel (1,3) Bus (1) Mobile (1,2) Note: 1) Financials and KPIs for fiscal year ended 31 March 2016 and combined on a pro-forma basis 2) Includes Air, Hotel and Bus transactions only 3) Includes MMYT’s international standalone hotel transactions 6

Pursue scale – classifieds and payments Classifieds: LetGo accelerating vs. OfferUp* Payments: Citrus acquisition by PayU Jan 16 Sep 16 0.55x Downloads 1.25x • Largest ever all-cash M&A deal in Indian fintech history • Increased customer base to >30m customers and +200k merchants 0.53x • Benefits: MAUs – new verticals (airlines and telco), – innovative products (LazyPay and SellFie), 1.15x – additional expertise • Strong starting point for a consumer play and for expansion of * USA – Size vs. OfferUP financial services proposition to consumer credit Source: Company data; AppAnnie; Press releases 7

Transform further into mobile Classifieds: Substantial active user growth on OLX app Mobile growth in % time spent across Naspers platforms App MAU (daily, m)* User time spent – Naspers platforms (mobile share) 77% 52% 55% 66 37 2Q FY16 2Q FY17 Sep 15 Sep 16 *Reflects associates and JVs on a proportionate basis based on economic interest as per Sep 2016 Source: Company data Source: Similarweb 8

Allegro: disposal to realise value for shareholders Sold for US$3.253bn Buyers: Cinven, Permira and Mid-Europa private equity funds Terms and rationale Sale consistent with strategy to find and realise value for shareholders Price implies FY16 EBITDA multiple of 18.3x Transaction is tax neutral Proceeds to pay down debt, fund operations and future investments Announced 14 Oct 2016, subject to approvals; expect to close in Jan 2017 Financial summary (US$m) Returns (US$m) Sale price 3 967 321 313 Net cash flows ~3x 3,253 193 148 144 135 129 100 93 83 62 57 1,485 714 FY15 FY16 1H FY16 1H FY17 Initial investment Total return Revenue Trading profit Free cash flow 9

FINANCIALS

Synopsis of financials Revenue* (US$m) Development spend* (US$m) Currency impact 16% (27%) 23% (27%) 548 11 188 41 6,788 5,861 363 308 1H FY16 1H FY17 1H FY16 1H FY17 New investments Trading profit* (US$m) Core HEPS (USc) 21% (42%) 25% 196 1,473 212 169 1,214 1H FY16 1H FY17 1H FY16 1H FY17 *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 11

Revenue: Tencent and ecommerce drives acceleration in growth rate YoY revenue growth rate* (%) Revenue* by segment (US$m) Ecommerce (20%) 27% 26% Listed investments (52%) 22% 20% Video entertainment (24%) Media & other (4%) FY15 FY16 1H FY16 1H FY17 *Growth rates in local currency, excluding M&A Incremental revenue* by segment, YoY (US$m) YoY change (%) 1% 24% 46% 6% n/a 9% 16% (27%) (68) (548) (3) 110 258 1,178 6,788 5,861 1H FY16 Ecommerce Listed investments Video entertainment Media M&A and other Forex 1H FY17 *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 12

Development spend: increase due to new growth initiatives Consolidated development spend (US$m) Development spend* by segment (US$m) 820 Classifieds (44%) 38% (42%) 737 708 Etail (26%) 6 Other ecommerce (19%) 188 41 Video entertainment (9%) 239 199 Media (2%) FY14 FY15 FY16 1H FY16 1H FY17 Currency impact Operating New investments Incremental development spend* by segment, YoY (US$m) YoY change (%) >100% 17% 12% 3% 23% (27%) 152 (42) (7) (11) 496 404 Hotels 1H FY16 New investments Operating Associates Forex 1H FY17 *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 13

Increase in number of profitable ecommerce businesses Number of profitable ecommerce entities Financial progress of profitable entities* (US$m) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Trading profit Revenue 38% (25%) 774 765 23 21 18 87% (58%) 516 15 373 288 217 215 115 FY 15 FY 16 1H FY16 1H FY17 FY15 FY16 1H FY16 1H FY17 *Organic growth on a pro-forma basis, i.e. adjusting prior year numbers on a like-for-like basis, would have been 18% for revenue and 50% for trading profit 14

Recent M&A activity focused on Edtech Acquisition spend over time (US$m) 1H FY17 M&A by segment (US$m) 1,495 Other Other Naspers Ventures (89%) Classifieds (8%) 5yr average US$406m* Travel (1%) 465 420 139 Other (2%) 213 FY14 FY15 FY16 1H FY16 1H FY17 * Calculated from March 2012 – March 2016 (excluding Avito) 15

Summarised income statement US US$m 1H FY1 Y16 1H 1H FY1 Y17 Revenue* 5,861 6,788 Less: Equity-accounted investments (2,878) (3,830) Consolidated revenue 2,983 2,958 Trading profit 232 45 Trading margin 8% 2% Net finance costs (156) (165) Share of equity accounted results 635 912 Impairments (141) (28) Taxation (146) (144) Net profit 636 541 Core headline earnings 696 914 Core headline EPS (US$) 1.69 2.12 *Based on economic interest, i.e. Equity-accounted investments are proportionately consolidated. 16

Free cash flow impacted by reduced profitability of VE in SSA FCF breakdown (US$m) 120 (174) (13) (1) 46 24 (4) 1H FY16 Cash from operations Working capital Capex Dividends received Other 1H FY17 17

Balance sheet remains strong Group net consolidated debt (US$m) US US$m 1H FY17 32% 30% 23% 30% 2,213 13% Debt (1) : (offshore US$2.9bn) 12% 20% 3,007 1,994 10% 1,496 1,461 0% Cash: (South Africa US$550m) 1,511 1,213 -10% -20% Closing net debt 1,496 -30% - FY14 FY15 FY16 1H FY16 1H FY17 Gearing 13% Net debt Gearing % (1) Excludes satellite lease liabilities (US$1,232m) and non-interest bearing debt (US$161m) 18

IN INTERNET

Ecommerce: continues to grow rapidly Revenue and trading losses* (US$m) Revenue split Etail (55%) Marketplace (14%) Classifieds (14%) Other (6%) 14% (24%) Payments (6%) 50 Travel (5%) 2,647 2,492 1,986 1,379 Constant currency revenue growth by type 1,210 1% (14%) 10 76% 75% (296) (292) (516) (543) (541) 30% 29% FY14 FY15 FY16 1H FY17 1H FY16 -6% 16% Classifieds Travel Marketplace Payments Etail Other Revenue Trading losses Currency impact *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 20