Financial Results Presentation For the year ended 31 March 2014 1 - PowerPoint PPT Presentation

Financial Results Presentation For the year ended 31 March 2014 1

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

Overview Financials Internet Pay-TV Outlook Appendix 3

Transformation at our core Mobile Internet 2010 – PayTV 1997 – Print 1985 – 1915 – 1 > 50 > 80 Naspers countries 4

Fast changing landscape provides rare opportunities Mobile is transforming the internet, particularly in our markets 1 Our internet focus markets are scaling much faster than average 2 3 Etail and classifieds are reshaping ecommerce 4 New innovations are emerging outside developed markets 5

Mobile transforming internet in our markets Number of internet users (m); 2009 – 2013 Growth (%) Naspers focus markets sample +60% 616 384 +19% 260 +205% 218 177 +33% +2% +95% +6% 106 +8% +206% 99 101 81 76 69 65 58 56 52 52 41 17 Russia Indonesia Brazil India China United Germany Japan United States Kingdom 2009 2013 Source: IDC, Naspers 6

Focus internet markets scaling faster than average Growth in internet buyers, 2009 – 2013 CAGR (%) Naspers focus markets sample 77 71 38 34 34 32 26 24 22 10 9 3 Japan W EU US LatAm CE EU Asia ex- China Russia Brazil MEA Turkey India Japan Source: IDC, Naspers 7

Etail and classifieds reshaping ecommerce India: 2009 – 2013 (GMV growth %) 194 140 139 66 Total ecommerce Total classifieds Etail Mobile classifieds Source: IDC, Naspers 8

New innovations emerging outside the US WeChat: Mobile payments: Transforming social communication, Solving unique local problems. entertainment & ecommerce Forty percent of Kenya’s GDP on mobile Redbus: Aggregating & taking Indian transport mobile Mobile messaging: Developing new revenue streams from micropayments LTE/4G: World’s first next generation phones & technology QR codes: Wearable tech: First developed in Asia, allows Developing gesture controlled devices easy offline to online for all possible uses engagement & shopping 9

FY14 in review Extended classifieds aggressively, prioritising mobile Continued rapid etail expansion Scaled payments, travel, mobile services Tencent transforming Weixin/WeChat to a broad platform Expanded Pay-TV distribution platforms 10

Financials Overview Internet Pay-TV Outlook Appendix 11

FY14: Financial synopsis Revenue (ZARbn) Core headline earnings (ZARbn) 26% 1% 62.7 49.9 8.6 8.5 DPS (ZAR) Core HEPS (ZAR) -2% 10% 22.16 21.81 4.25 3.85 Mar 13 Mar 14 12

Strong performance by established businesses Pay-TV profitability (ZARm)* Tencent profitability (RMBm)* Mail.ru profitability (RURm)* 24% 31% 13% EBITDA (RURm) CAGR +13% 19,194 CAGR 15,087 8,520 +34% CAGR +63% 7,559 15,479 11,535 6,379 5,927 12,254 5,295 8,381 9,838 6,020 3,628 2,152 Mar 10 Mar 11 Mar 12 Mar 13 Mar 14 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 * To conform with publicly disclosed data, profitability for pay-TV reflects trading profit, for Tencent it is operating profit and for Mail.ru it refers to EBITDA. 13

Pursuing major new growth opportunities Ecommerce revenue and trading profit/(losses) (ZARm) 24,000 64 % 20,355 18,000 CAGR +60% 12,000 12,386 6,000 6,643 4,218 3,085 – (107) (207) (1,238) (2,337) (5,329) (6,000) Mar 10 Mar 11 Mar 12 Mar 13 Mar 14 Revenue Trading profit/(losses) 14

Additional development captures more opportunities Incremental development spend by segment, YoY (ZARm) Ongoing investment Aim is to build new revenue opportunities Funded by internal sources 73% >100% 86% 79% 95 915 Internet 2,379 Focused on ecommerce expansion Increased investment in brand advertising Improved talent and execution capacity 7,656 Continued to scale etail businesses More than doubled investment in classifieds 4,267 Pay-TV ZAR1,327m invested in DTT Additional R485m spent on: - online and mobile technologies Mar 13 Internet Pay-TV Print Mar 14 - decoder development 15

Internet largest revenue growth driver and segment Incremental revenue by segment, YoY* (ZARm) Internet 65% 20% -2% 37% Strong growth across all platforms Some uplift from change in business mix (240) 6,014 22,431 Ecommerce revenue +64% YoY 104,981 Tencent revenue +67% YoY Mail.ru revenue +44% YoY 76,776 Mar 13 Internet Pay-TV Print Mar 14 Mar 13 Internet Pay-TV Print Mar 14 Pay-TV Benefited from : FY14 revenue by business segment* Revenue* (ZARm) - 20% increase in subscribers - 5% increase in subscription rates in SA 105,000 104,981 11,692 CAGR 30% 70,000 76,776 36,271 57,018 56,522 Print media 45,108 35,000 37,251 Tough year throughout Media24 +1% YoY Abril -3% YoY - Internet (54%) Pay TV (35%) Print (11%) Mar 10 Mar 11 Mar 12 Mar 13 Mar 14 * Based on economic interest, i.e. assuming equity accounted investments are proportionately consolidated 16

Summarised consolidated income statement Mar 13 Mar 14 Currency impact ZARm ZARm Revenue* up 22% in constant US$ rates Revenue* 76,776 104,981 Trading margin Less: Associates and joint ventures (26,907) (42,253) Consolidated revenue 49,869 62,728 Decline due to step-up in development spend Trading profit 5,912 3,906 Net finance cost 98% increase in net interest on loans due to: Trading margin 12% 6% - Higher debt levels to fund acquisitions - Negative effect of currency translation Net finance costs (1,310) (2,127) Share of equity accounted results 8,778 10,835 Income from associates Includes ZAR2.9bn (FY13 R2.6bn) book profit from: Impairments (2,822) (2,774) - Mail.ru’s sales of shares in Facebook and Qiwi - Tencent’s merger of ecommerce operations with Taxation (2,533) (2,895) JD.com and sale of interest in China Vision Net profit 6,748 6,529 Impairments Core headline earnings 8,533 8,616 R1.1bn relates to flash sales fashion businesses Core headline EPS (ZAR) 22.16 21.81 Abril fully impaired by a further R1.2bn * Based on economic interest, i.e. assuming equity accounted investments are proportionately consolidated 17

Expansion of DTT and development spend lowers FCF Capex Mar 13 Mar 14 ZARm ZARm Pay-TV ZAR3.7bn (mainly DTT) Ecommerce ZAR447m Print ZAR473m Net of proceeds on sale of assets of ZAR197m Operating cash flow 8,577 7,376 Finance leases Capex (2,743) (4,442) Impacted by new satellite lease for MCSA Finance leases (585) (805) Tax (2,670) (3,319) Tax Increase due to higher profits in SA Investment income 1,103 841 Free cash flow (FCF) 3,683 (349) Investment income Includes ZAR793m dividend from Tencent 18

Balance sheet remains sound Increase Mar 14 ZARm US$465m of debt-funded acquisitions Some currency impact on translation Debt: (offshore US$2.6bn) (27,990) Net debt Cash: (South Africa R5bn) 12,583 Excludes transponder leases of ZAR7.3bn, considered to be an operating cost Closing net debt (15,407) Interest cover 10x Gearing 23% 19

Internet Overview Financials Pay-TV Outlook Appendix 20

Large global internet footprint* * Only includes country of domicile for associates, not their entire footprint 21

Naspers has a substantial ecommerce presence Monthly average desktop visits in billions, Y/Y growth % (excl. payments-related properties) 6 44 % 5 4 3 2 -1% -2% 24% 1 7% 38% -17% 21 % 0 Alibaba Amazon eBay Naspers Mercadolibre JD.com Rakuten Rocket Internet 1Q'13 1Q'14 Source: ComScore, Naspers 22

Ecommerce: summary ZARm Mar 13 Mar 14 % Change Strategic Expanded footprint and ambition level in classifieds Revenue 12,386 20,355 64% Organic and acquisitive growth in etail Consolidation of payments and online comparison shopping (OCS) into single business units Trading profit (2,338) (5,329) >-100% Strong and improving margins for marketplaces and comparison shopping Revenue: YoY growth by type Operational Leadership positions in all key markets 120% Significantly strengthened talent pool Growth accelerating 103% Competition remains strong 80% 84% Mobile on all platforms central to our plan 71% 40% Financial 35% 32% 24% Development spend accelerated to R5.6bn 0% Etail Classifieds Online OCS Payments Marketplaces services 23