Financial results presentation For the six months ended 30 September 2013
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 Overview Financial Results Internet Pay-TV Outlook Appendix 3
1H FY14: Highlights 1 Shift in business mix: majority international + internet 2 Solid revenue growth 3 Accelerated development spend 4 Thus more muted earnings growth 5 Increased traction in eCommerce 6 Pay-TV growth via DTT in Rest of Africa 4
Group Overview Financial Results Internet Pay-TV Outlook Appendix 5
1H FY14 key financials: Synopsis Sep 12 Sep 13 Revenue (ZARbn) Trading profit (ZARbn) 28% 15% 28.8 22.4 3.5 2.9 Core HEPS (ZAR) Development spend (ZARbn) 16% 87% 3.0 12.48 10.73 1.6 6
Summarised consolidated income statement Sep 12 12 Sep 13 Net interest on loans up 83% ZARm ZARm Higher debt levels to fund acquisitions US$1bn bond issued in July Revenue* 34,172 47,606 Negative effect of currency translation Less: Associates and joint ventures (11,767) (18,851) Consolidated revenue 22,405 28,755 Income from associates Trading profit 3,462 2,926 Includes ZAR1.3bn once-off book profit on Trading margin 15% 10% Mail.ru’s partial sale of Facebook and Qiwi Net finance costs (479) (915) Share of equity accounted results 3,990 5,139 Impairments Impairments (343) (1,841) R1bn relates to flash sales eCommerce businesses and R750m to Abril Taxation (1,383) (1,447) Net profit 4,658 3,423 Core HEPS +16% Core headline earnings 4,127 4,920 Increased 2% YoY in constant currency Core headline EPS (ZAR) 10.73 12.48 * Based on economic interest, i.e. assuming equity accounted investments are proportionately consolidated 7
Revenue 1H FY14 revenue by business* Incremental revenue YoY* (ZARm) 76% 18% 0% 39% 5,642 4 2,651 10,779 24,887 47,606 17,077 34,172 Internet (52%) Pay TV (36%) Print (12%) Sep 12 Internet Pay-TV Print Sep 13 * Based on economic interest, i.e. assuming equity accounted investments are proportionately consolidated Internet Pay-TV Print Robust growth across most platforms 21% YoY increase in subscribers Solid results from Media24 eCommerce revenue +98% YoY 6% increase in subscription rates Negatively impacted by poor results from Some benefit from change in business mix Advertising revenue healthy Abril due to weak operating environment Tencent & Mail.ru’s revenue +69% YoY 8
Development spend 1H FY14 split by business Incremental spend YoY (ZARm) 123% 18% 8% 87% 72 5 570 88 1,286 2,970 2,328 1,591 Internet (79%) Pay-TV (19%) Print (2%) Sep 12 Internet Pay-TV Print Sep 13 Seasonality in spending Internet Significant focus on classifieds 100% Investing in brand advertising Continue to scale etail businesses 59% 60% 63% 50% Pay-TV 41% 40% 37% ZAR397m for DTT and online ZAR173m for other technologies 0% FY11 FY12 FY13 1H 2H 9
Trading profit 1H FY14 split by business* Incremental profit* (ZARm) 24% 11% 13% 16% 214 457 (33) 749 3 879 8,570 4 477 7,397 Sep 12 Internet Pay-TV Print Sep 13 Internet (45%) Pay TV (52%) Print (3%) * Based on economic interest, i.e. assuming equity accounted investments are proportionately consolidated Internet Pay-TV Print R5.7bn contribution from Tencent and Mail.ru DTT roll-out continuing Declining advertising revenues Trimmed by ecommerce loss of ZAR1.8bn Accelerated investment in local content SA profits up marginally Continue focus on scaling operations Positive contribution from Irdeto Abril losses increased to R35m 10
Free cash flow Capex +99% Pay-TV ZAR1.7bn (mainly DTT) Internet ZAR161m Sep 12 Sep 13 Print ZAR216m ZARm ZARm Operating cash flow 3,296 3,904 Finance leases Capex (994) (1,978) Impacted by new satellite lease for MCSA Finance leases (266) (382) Tax Tax (1,265) (1,591) Increase due to higher profits in SA Investment income 986 834 Free cash flow 1,757 787 Investment income Includes ZAR793m dividend from Tencent No dividends from Mail.ru or Abril 11
Net debt Increase Sep 13 US$347m of debt-funded acquisitions ZARm Some currency impact on translation Debt: (offshore US$2.5bn) (26,706) Net debt Cash: (South Africa R6bn) 14,683 Excludes transponder leases of ZAR7.2bn, considered to be an operating cost Closing net debt (12,026) Interest cover 9x Gearing 20% 12
Group Overview Financial Results Internet Pay-TV Outlook Appendix 13
eCommerce: strategy 14
eCommerce: financial summary Revenue by type ZARm Sep 12 Sep 13 % C Chang nge Revenue 3,991 7,907 98% Trading profit (726) (1,779) >-100% Operational Competition increasing in many markets Mobile development remains a key priority More localisation of product offering and services e-Tail (84%) Financial Classifieds (7%) 16% organic revenue growth, mainly marketplace platforms Payments (6%) 22% revenue growth from currency and rest acquisitive Development spend more than doubled to R2.3bn Other (3%) 15
eCommerce: development spend 1H FY14 development spend by type Revenue and development spend (ZARm) 98% 9,000 123% 131 92 7,907 681 6,000 1,424 3,000 3,991 2,328 Classifieds (61%) 2,478 1,043 eTail (29%) 575 - Payments (4%) Sep 11 Sep 12 Sep 13 Other (6%) Revenue Development spend 16
eCommerce: classifieds Daily visits (m)* Daily page views (m)* 266% 20 115% 300.0 250.0 15 200.0 10 277 16.7 150.0 100.0 7.8 5 76 50.0 - - Sep 12 Sep 13 Sep 12 Sep 13 Page views by region* Strategic Market presence in ~40 countries, leading position in several Stepping up investment to extend gap over competitors Europe (57%) India and Brazil key areas of focus India & SE Asia (27%) Operational Latin America (8%) Focus on building brands and expanding user base Africa & Middle East (8%) Healthy growth on engagement metrics Some monetisation of vertical sites, mainly advertising Monetisation of general sites not a near-term objective 17 * Select criteria as measured for the month of September, not adjusted for acquisitions and disposals and reflecting associates on a proportionate basis
eCommerce: e-tail Revenue (ZARm) GMV by region ** 105% 7,500 Europe (91%) 6,000 India & SE Asia (4%) 4,500 Africa & Middle East (3%) 6,651 3,000 Latam (2%) 3,241 1,500 - Sep 12 Sep 13 **Includes GMV for lead-comparison operations on an imputed basis Strategic Financial Operational 16% revenue growth organic, rest B2C retail growth accelerating, leadership Continuing to scale operations and invest in in all key markets acquisitive driving traffic Some impact from change in business mix Price comparison business growing ahead Some investment to improve fulfilment and of market distribution Flash sale fashion businesses repositioned 18
Internet: Q3 2013 statistics RMBm Bm* Jun 12 Jun 13 % C Chang nge • 272m combined monthly active WeChat and Weixin Revenue 20,175 27,932 38% user accounts (+124% YoY) • 816m monthly active IM user accounts (+4% YoY) • 623m monthly active Qzone user accounts (+5% YoY) Operating profit 7,629 9,628 26% Operating margin 38% 34% Operations * Data for 1H FY13 reflects 100% of results Jan-Jun 2013 available on www.tencent.com; 1H FY14 ZAR/RMB 1.61 (1.30) Strong performance from online and smartphone games Further investment in mobile smartphone apps - Weixin expanded rapidly, supported by new features Revenue mix 1H FY14* - Step-up in international marketing of WeChat Progress in online advertising and eCommerce Merger with Sogou on search VAS (77%) Financials eCommerce transactions (15%) Solid growth in revenues and profits Advertising and other (8%) eCommerce initiatives reducing margins Sales and marketing expenses increased 19
Recommend
More recommend
