Financial Results Presentation F For the 6 months ended 30 September 2009 th 6 th d d 30 S t b 2009
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 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 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 (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
Group Highlights p g g Key Messages Financial Results Performance by business Outlook Appendix 3
Group highlights • Revenue up 6% and EBITA 19% Financial • EBITDA margin expanded to 24% • Core headline earnings up 37% to ZAR2.4bn Core headline earnings up 37% to ZAR2 4bn • • P Pay-TV subscribers +11% YTD (352,000 gross additions) TV b ib +11% YTD (352 000 dditi ) • Operational Print margins hit by recession • Technology operations reached EBITDA break-even • BuscaPé acquisition (US$342m) boosts Brazil footprint BuscaPé acquisition (US$342m) boosts Brazil footprint Strategic • Other 1H FY10 internet acquisitions total US$50m 4
Financial Highlights Sept 08 Sept 09 Revenue (ZARbn) EBITDA (ZARbn) EBITDA Margin (%) Up 6% Up 15% Up 13.5 12.7 24 3 2 3.2 22 22 2.8 Operating Profit (ZARbn) Operating Profit (ZARbn) Core Headline Earnings (ZARbn) Core Headline Earnings (ZARbn) Core HEPS (ZAR) Core HEPS (ZAR) Up 16% Up 37% Up 36% 1 9 1.9 2 4 2.4 6 48 6.48 1.7 4.76 1.8 4.76 5
Group Highlights p g g Key Messages Financial Results Performance by business Outlook Appendix 6
Key messages 1 Continued growth in internet 2 2 Subdued revenue growth partly due to currency fluctuations 3 Scale, restructuring and cost-management drove margin expansion 7
Group Highlights p g g Key Messages Financial Results Performance by business Outlook Appendix 8
Summary consolidated income statement 1 Sept 08 Sept 09 Revenue growth +6%, but +10% at constant ZARm ZARm ZARm ZARm fx rates 1 Revenue 12,652 13,455 2 2 EBITDA 2,795 3,224 EBITDA growth accelerated (+15% YoY) due to EBITDA growth accelerated (+15% YoY) due to cost control; EBITDA margin expanded to 24% Operating profit 1,663 1,926 3 Net interest paid 133 150 Higher tax charge due to increased profitability; g g p y; effective tax rate now 33%, assessed losses Taxation -796 -1,051 3 utilised Profit after taxation 995 1,883 4 C Core headline earnings h dli i 1 763 1,763 2 414 2,414 Core headline earnings up 37% Core headline EPS (ZAR) 4.76 6.48 4 Ch Change in accounting policy: segmental analysis i i li l l i now presented on same basis as for internal management purposes, i.e. investments in associates proportionately consolidated 9
Subdued revenue* growth Revenue* (ZARm) Revenue (ZARm) R Revenue (ZARm) (ZAR ) Sept 08 S t 08 S Sept 09 t 09 % Ch % Change Sept 08 8,000 Sept 09 Economic interest 15,855 17,521 11% 7,000 6,000 5,000 4,000 8,019 6,985 3,000 5,001 4,836 2 000 2,000 4 061 4,061 3,144 • Pay-TV revenue up 15%, driven by subscriber 1,000 growth of 25% YoY 725 605 0 • Internet resilient; revenue up 29% driven mainly Pay-TV Internet Technology Print by Tencent growth b T t th Revenue* – historic growth (ZARm) • Internet adspend growing 40,000 • Print remains under pressure due to slump in 34,152 35,000 advertising revenue advertising revenue 30,000 24,742 25,000 19,790 20,000 14,135 15,000 11,858 10,783 10,000 5,000 - 2004 2005 2006 2007 2008 2009 10 * Based on economic interest, i.e. assuming all investments are proportionately consolidated
Diversified revenue streams reduce risks 1H FY10 Revenue by Type * 1H FY10 Revenue by Business * Subscription (42%) Pay-TV (46%) IM & Games (12%) Internet (23%) e-Commerce (7%) Technology (3%) Technology (3%) Printing & distribution (11%) Print (28%) Book publishing (3%) Advertising (15%) Technology (3%) Other (7%) * Based on economic interest, i.e. assuming all investments are proportionately consolidated Exposure to advertising-related revenues is limited, the large spread of operating assets reduces exposure to any one technology or business model 11
Operating profit* up Operating Profit (ZARm) O ti P fit (ZAR ) S Sept 08 t 08 Sept 09 S t 09 % Ch % Change Operating Profit** (ZARm) 3,269 4,108 26% 3,000 Economic interest 2,694 Sep 08 2,500 Sep 09 20.6% 23.5% Operating margin 2,099 , 2,000 * Before amortisation, other gains/losses 1,500 1,098 1,000 735 484 327 500 • Margin expansion due to: -49 -11 0 – scale Pay-TV Internet Print Technology – restructuring – restructuring -500 500 – cost-management Operating Profit** – historic growth (ZARm) • Internet margins affected by R&D 8,000 7,146 • T • Technology benefited from restructuring h l b fit d f t t i 7,000 7 000 6,000 • Print margins impacted by drop in adspend 5,362 5,000 4,171 4,000 , 2,677 3,000 2,321 1,650 2,000 1,000 - 2004 2005 2006 2007 2008 2009 12 ** Based on economic interest, i.e. assuming all investments are proportionately consolidated
Development costs scaled back 1 ZAR54m for Allegro/Ricardo Sept 08 Sept 09 ZAR33m for ibibo % Change ZAR26m for 24.com ZARm ZARm ZAR29m for instant messaging Internet 184 203 10% 1 2 2 Pay-TV y 197 113 -43% ZAR98m for mobile TV ZAR98m for mobile TV Technology 158 134 -15% 3 Media24 reduced to ZAR32m Print Print 99 99 32 32 -68% 68% 3 3 4 Total 638 482 -24% 4 Total spend amounted to 4% of turnover; to accelerate in 2H 13
Equity accounted income growing strongly 1 Sept 08 Sept 09 % Tencent benefited from strong growth ZARm ZARm ZARm ZARm Change Change in online gaming revenue g g 1 Tencent 413 901 118% 2 Mail.ru 24 44 83% 2 Mail.ru starting to benefit from Mail ru starting to benefit from recovery in online advertising Abril -13 -62 - 3 Other -19 -11 - 3 Equity accounted earnings 405 872 115% Abril affected by economic downturn Tencent, Mail.ru and Abril numbers reflect their financial periods Jan-Jun 09 14
Free cash flow more than doubled Sept 08 Sept 09 ZARm ZARm 1 O Operating cash flow f 2,380 2,940 Pay-TV ZAR186m Internet ZAR83m Capex -630 -495 1 Technology ZAR61m Print ZAR165m Finance leases -195 -212 2 2 Tax -896 -859 Dividends from Tencent and mail.ru 2 2 Investment income 100 284 Free cash flow (continuing operations) 759 1,658 15
Net consolidated debt – low gearing Sept 09 1 ZARm Largely to fund acquisitions Largely to fund acquisitions Net cash – South Africa 2,408 2 Net debt – offshore (US$659m) 4,972 1 Excluding transponder leases of c ud g t a spo de eases o ZAR835m (considered an operating cost ) 2 Closing net debt 2,564 Group gearing 8% Debt facility extended to US$1 6bn Debt facility extended to US$1.6bn until 2013 EBITDA cover 2.5x 16
Group Highlights p g g Key Messages Financial Results Performance by business Outlook Appendix 17
Internet: Naspers strategy Social Network Commerce Fixed Communication Games Mobile Community Content M-VAS Six-pillar strategy built around developing “sticky” communities, which help create dominant positions and sustainable advantage against competitive and technological threats 18
Emerging Market focus 19
Internet: Allegro Group - Poland Tracking ahead of expectations PLNm Sep 08 Sep 09 % Change • Poland growing strongly g g g y • Development continues within vertical related Revenue 203 268 32% transaction services EBITA 85 104 23% • Core transaction margins remain largely in tact • Some dilution due to new developments EBITA margin - total EBITA margin total 42% 42% 39% 39% Some dilution due to new developments • Acquired 83% of Bankier.pl for US$19m EBITA margin – core 44% 43% * Data reflects 100% of results; 1H FY10 ZAR/Zloty 2.59 (3.50) Monetisation rate (%) Revenue mix 1H FY10 Success fees (40%) Success fees Listing fees (31%) Other Listing and promotion Promotion (14%) Development (7%) Classifieds (5%) Classifieds (5%) Price comparison (3%) Total rate 6.8% 20
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