Financial results presentation For the year ended 31 March 2012 - PowerPoint PPT Presentation

Financial results presentation For the year ended 31 March 2012

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

Group Highlights Key Messages Financial Results Operational Performance Outlook Appendix 3

FY12 Key financials Mar 11 Mar 12 EBITDA (ZARbn) Revenue (ZARbn) Up 19% Down 3% 39.5 7.1 7.0 33.1 Core HEPS (ZAR) DPS (ZAR) Up 24% Up 15% 3.35 18.50 16.12 2.70 4

FY12 Group highlights • Revenue up 19%, mainly driven by internet • EBITDA down 3%, impact of expensing growth initiatives Financial • Core HEPS grew 15% to ZAR18.50 • 24% increase in DPS proposed • Internet: +59% revenue growth, services being developed Operational • Pay-TV: sub growth +14% YoY , competition increasing • Print: effective cost controls, improved results • Building out e-commerce businesses and DTT • Ongoing focus on organic growth Strategic • Development spend up 84% to ZAR2.8bn (US$380m) • Acquisitions amounted to $260m 5

Group Highlights Key Issues Financial Results Operational Performance Outlook Appendix 6

FY12 Key issues 1 Maintained revenue growth 2 Increased focus on e-commerce 3 Acceleration in development spend 4 Satisfactory pay-TV growth 5 Fewer M&A opportunities 6 Group diversity reduces risk 7

Maintained revenue growth momentum Revenue (ZARm)* 60,000 56,522 50,000 45,103 40,000 37,251 34,505 30,000 25,305 20,000 10,000 - Mar 08 Mar 09 Mar 10 Mar 11 Mar 12 * Based on economic interest, i.e. assuming all equity accounted investments are proportionately consolidated 8

Increased focus on e-commerce e-commerce as % of total retail (2011A) 9% 8% 6% 6% 5% 4% 4% 3% 3% 3% 2% 2% 2% 2% 3% 1% 1% 1% 0% UK USA Czech Poland W EU Brazil Eurozone Japan EEU Russia Hungary Ukraine Romania Turkey Mexico Source: Euromonitor, BofA- ML Global Research, select GEM markets in orange Naspers e-commerce revenue (ZARm) 6 000 5 725 5 000 3 684 4 000 2 761 3 000 2 389 2 000 1 000 - Mar 09 Mar 10 Mar 11 Mar 12 9

Acceleration in group development spend Development spend as % of revenue 7% 6% 5% 7.1% 4% 6.1% 5.5% 5.7% 3% 5.1% 5.0% 4.6% 4.5% 4.4% 4.0% 3.6% 2% 1% 0% Mar 07 Sep 07 Mar 08 Sep 08 Mar 09 Sep 09 Mar 10 Sep 10 Mar 11 Sep 11 Mar 12 Development spend vs. Other operating costs (ZARm) 36,000 2,823 1,535 27,000 1,240 1,211 1,093 18,000 31,180 25,712 21,311 20,363 9,000 15,187 - Mar 08 Mar 09 Mar 10 Mar 11 Mar 12 Other operating costs Development costs 10

Pay-TV subscriber growth satisfactory Net additions (‘000) 500 400 Average = 349 300 200 100 - Mar 08 Sept 08 Mar 09 Sept 09 Mar 10 Sept 10 Mar 11 Sept 11 Mar 12 11

Fewer M&A opportunities Acquisitions FY12 Total cost Total cost Percentage Company Date FCm US$m acquired Travel Boutique Mar 12 INR1,000 20 50% Markafoni Jul/Dec 11 PLN239 95 80% Slando Jul 11 US$29 29 100% Fashion Days Dec 11 PLN185 54 90% 7 Pixel Apr 11 EUR23 35 85% Other 27 TOTAL 260 Total acquisition spend (US$m) 1 000 750 754 500 517 250 260 214 - Mar 09 Mar 10 Mar 11 Mar 12 12

Diversification reduce risks FY12 Revenue by Business* FY12 Revenue by Type* FY12 Revenue by Geography* Pay TV (43%) Subscription (37%) South Africa (46%) Internet (34%) Asia (22%) IVAS & games (20%) Print Media (21%) Latam (11%) Advertising (14%) Technology (2%) Rest of Africa (11%) Print media (9%) Europe (9%) e-commerce (9%) Other (1%) Technology (4%) Other (7%) * Based on economic interest, i.e. assuming all investments are proportionately consolidated 13

Group Highlights Key Issues Financial Results Operational Performance Outlook Appendix 14

Summary consolidated income statement Mar 11 Mar 12 ZARm ZARm Revenue 33,085 39,487 1 1 Revenue growth 19% YoY, some acceleration in 2H EBITDA 7,149 6,960 2 EBITDA margin 22% 18% EBITDA and trading profit lower mainly due to 84% 2 rise in development spend Trading profit 5,838 5,485 2 3 Net finance costs (1,018) (697) 3 Interest paid flat due to lower rate on new RCF; BEE preference dividends and net foreign Share of equity accounted results 3,290 3,869 exchange impact both favourable Other 1,480 (834) 4 4 Taxation (1,861) (2,059) Current year affected by accounting movements in associates and prior year by Mail.ru roll-up into DST Net profit 5,947 3,481 5 Core headline earnings 6,036 6,951 5 Core headline earnings growth +15% Core headline EPS (ZAR) 16.12 18.50 15

Revenue growth mainly driven by internet Revenue* – historic growth (ZARm) Revenue* (ZARm) Mar 11 Mar 12 % Change 55,000 56,522 Economic interest 45,103 56,522 25% 45,000 45,103 35,000 37,251 34,505 • Internet delivered 59% growth YoY 25,000 - Tencent & Mail.ru’s contribution +59% 25,305 - Other internet increased 57% 15,000 5,000 • Pay-TV revenues grew 15%, driven by: Mar 08 Mar 09 Mar 10 Mar 11 Mar 12 - 14% increase in subscribers Revenue* (ZARm) - Good growth in advertising revenue 25,000 Mar 11 • Print buoyed by commercial print contracts 24,093 20,000 Mar 12 21,025 19,192 15,000 12,092 12,071 10,000 10,758 5,000 - Pay-TV Internet Print * Based on economic interest, i.e. assuming equity accounted investments are proportionately consolidated 16

Focus on organic growth Development spend per business division Mar 11 Mar 12 1 % Change ZARm ZARm ZAR1.7bn for e-commerce Internet 705 1,857 163% 1 2 Pay-TV* 607 731 20% 2 ZAR543m for DTT, mobile TV and online ZAR134m for other technologies Other 223 235 5% Total 1,535 2,823 84% * Development cost for the technology business included in pay-TV Development spend (ZARm) Development spend split FY12 3 000 2 823 Internet (66%) 2 500 Pay-TV (26%) 2 000 Other (8%) 1 500 1,535 1,240 1,211 1 000 1,129 500 0 Mar 08 Mar 09 Mar 10 Mar 11 Mar 12 17

Rise in development spend = lower profit growth Trading profit* – historic growth (ZARm) Trading profit (ZARm) 1 Mar 11 Mar 12 % Change 12,000 Economic interest 10,220 11,210 10% 11,210 10,000 Trading margin 23% 20% 10,220 1 Before amortisation, other gains/losses and including transponder leases 8,000 8,537 7,173 6,000 5,243 4,000 • Pay-TV profit margins affected by growth initiatives: - Roll-out of DTT services 2,000 - Additional investment in content - Mar 08 Mar 09 Mar 10 Mar 11 Mar 12 • Internet margin down to 20% due to: Trading profit* (ZARm) - cost of scaling e-commerce operations - further expansion of Allegro’s product offering Mar 11 6 000 6,331 - lower Tencent margins Mar 12 5 727 5 000 4 000 • Print margin benefited from effective cost management 3,800 3 493 3 000 2 000 1 000 1,090 872 - Pay-TV Internet Print * Based on economic interest, i.e. assuming equity accounted investments are proportionately consolidated 18

Increased contribution from associates Associate contribution to core headline earnings Mar 11 Mar 12 1 % Change ZARm ZARm Continued increase in internet usage and solid growth in core business Tencent 3,164 4,376 38% 1 2 Mail.ru 152 364 139% 2 Online advertising and community IVAS Abril 250 205 -18% remain key drivers of monetisation 3 Other 28 7 -75% 3 Affected by deferred tax adjustments TOTAL 3,594 4,952 38% * Tencent, Mail.ru Group and Abril numbers reflect their financial periods Jan-Dec 2011 19

Higher capex = lower free cash flow FCF from operations Mar 11 Mar 12 1 ZARm ZARm Pay-TV ZAR1,187m Operating cash flow 7,386 7,505 Internet ZAR367m Print ZAR360m Capex (1,555) (2,034) 1 Finance leases (473) (477) 2 2 Tax (1,983) (1,923) Dividends received from associates Investment income 616 547 2 Free cash flow 3,991 3,619 Free cash flow (ZARm) 5,000 4,000 4,123 3,991 3,619 3,000 2,432 2,000 2,062 1,000 - Mar 08 Mar 09 Mar 10 Mar 11 Mar 12 20

Balance sheet remains strong Group net consolidated debt Mar 12 ZARm 1 Net debt – offshore (US$1.2bn) (9,578) 1 Consequence of debt-funded acquisitions Minus: Net cash – South Africa 4,983 2 Closing net debt (4,595) 2 Excludes transponder leases of ZAR2.4bn, considered to be an operating cost Group gearing (excl. transponder leases) 10% Interest cover 11x 21

Group Highlights Key Issues Financial Results Operational Performance Outlook Appendix 22

Internet Focus 23