Results presentation For the financial year ended 31 March 2008 - PowerPoint PPT Presentation

Results presentation For the financial year ended 31 March 2008

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 number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from out expectations. These include key factors that cold 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

Highlights Financial overview Operational overview Outlook Appendix

Group strategy Operating platforms that link users to media services, content and means of Business strategy communication Providing entertainment, information, trading opportunities and friends Providing entertainment, information, trading opportunities and friends Vision for users Vision for users wherever the user might be Packaging media content, building brand names around it, and running Core expertise platforms that distribute media products, selling advertising and managing paying subscribers 4

Business focus Internet Pay TV Print Technology 5

Financial Highlights 2007 2008 Revenue (ZARbn) Revenue (Rbn) EBITDA (ZARbn) EBITDA Margin (%) Down 1% Up 19% Up 15% 25 20.5 24 4.9 17.2 4.2 HEPS (ZAR) Core HEPS (ZAR) DPS (ZAR) Up 24% Up 16% Up 15% 1.80 11.16 10.76 1.56 9.65 8.66 6

Operational highlights Major focus on Investing in 4 key segments (communication, social networks, e-commerce internet and content). 13 companies mainly across 18 countries FY08 acquisitions totalled ZAR22bn – cash outflow ZAR17bn. Significant Includes 100% of Tradus, 97% of Gadu-Gadu, 100% of Cloakware and acquisitions 40% of M-Net/SuperSport Selective disposals Sold Educor, announced disposal of NetMed and M-Web Solid pay-TV Solid subscriber growth rate (13% YoY) - 246,000 net additions performance Targeting lower income groups through cheaper bouquets Print media under Print advertising revenue growth slowed to 9% due to tough consumer environment. Maintained 15% share of total SA adspend pressure Increase in Development costs increased 29% YoY to ZAR1.1bn - specific focus on development costs broadband, internet technologies and mobile TV 7

Highlights Financial overview Operational overview Outlook Appendix

Revenue and operating margin Revenue ZARbn Mar '07 Mar '08 YoY Change • YoY increase 19%, organic growth 18% Revenue 17.2 20.5 19% • Pay TV revenue increased 22% boosted by Operating profit* 3.7 4.2 15% 13% subscriber growth Operating margin 21.4% 20.7% • Total advertising revenue increased 16% * Before amortisation, other gains/losses Operating margin (%) Operating margin • Margin fairly stable despite rapid growth 25% 21.4% 20.7% 19.7% 18.8% • Minor margin erosion in FY08 due to 29% 20% increase in development costs 15% 10% 5% 0% FY05 FY06 FY07 FY08 9

Portfolio Analysis* Segmental revenue Segmental Development Costs Pay TV (45%) Pay TV (18%) Technology (4%) Technology (26%) Internet (16%) Internet (27%) Print Media (35%) Print Media (29%) Geographic revenue Segmental Acquisitions South Africa (61%) Pay TV (19%) Rest of Africa (13%) Technology (4%) Europe (7%) Internet (76%) Asia (6%) Print Media (1%) South America (11%) Other (2%) * Assuming all investments are proportionately consolidated, regardless of when the investment/acquisition was made. 10

Development costs • Pay-TV: Mar '07 Mar '08 YoY ZARm ZARm Change – Relates mainly to mobile TV trials – Reduced spending due to delay in DVBH licensing in SA Pay-TV 260 205 -21% • Internet: – ZAR103m (FY07 ZAR30m) attributed Internet 103 291 +183% to Indian start-up ibibo to Indian start-up ibibo – ZAR72m attributed to 24.com Technology 290 307 +6% • Print: Print 223 326 +46% – Mainly relates to new magazine and newspaper titles Total 876 1 129 +29% 11

Equity accounted results Mar '07 Mar '08 YoY ZARm ZARm Change Tencent 343 615 +79% Abril Abril 99 99 150 150 +52% +52% Mail.ru - 49 - Other (1) (42) - Contribution to core headline earnings 441 772 +75% 12

Summary income statement Mar '07 Mar '08 ZARm ZARm Revenue 17 218 20 518 Operating profit 3 416 3 878 Finance costs (338) 1 005 Share of equity accounted results 339 654 Impairment of equity investments Impairment of equity investments (176) (176) (279) (279) Profit on sale of investments 3 16 Income before taxation 3 244 5 274 Taxation (1 185) (1 378) Profit after taxation 2 059 3 896 Core headline earnings 2 854 3 948 Core headline EPS 965 1 116 13

Income Statement – Special Items Net finance income amounted to ZAR1bn. Includes interest earned of Finance costs ZAR602m on net cash deposits, mainly on the capital raised in March 2007 and deployed only in the latter half of the year Impairments Investments in BMC and Titan Media were impaired The tax charge increased 16% due to higher profitability. The effective tax Taxation rate was 32% (FY07 33%) NetMed, to be sold, recorded a net profit from operations of ZAR396m Discontinued Educor, sold in October 2007, incurred a net loss from operations of operations ZAR153m and a loss on discontinuance of operations of ZAR82m. 14

Free cash flow Mar '07 Mar '08 ZARm ZARm Operating cash flow 4 572 5 104 Capex (875) (1 221) Finance leases Finance leases (330) (330) (340) (340) Tax (1 228) (1 553) Investment income 50 71 Discontinued operations (8) 162 Free cash flow 2 182 2 223 15

Capital Expenditure Mar '07 Mar '08 YoY Change ZARm ZARm Internet (excl. associates) 89 113 +27% Pay TV 191 573 +200% - Customer service centres 54 167 - Transmission equipment/studios - Transmission equipment/studios 51 51 255 255 - Other 86 151 Print 550 496 -10% Technology 45 39 -13% Total 875 1 221 +40% 16

Details of acquisitions Company Effective Total Total Cash Percentage Effective Accounting Method date cost cost outflow acquired holding FCm ZARm ZARm Tradus Mar 2008 £949 15,293 14,608 100% 100% Consolidated Dayport Feb 2008 $29 227 227 100% 100% Consolidated Gadu Gadu Dec 2007 € 110 1,126 904 97% 97% Consolidated Titan - Additional stake Dec 2007 $14 93 93 17.2% 37.4% Equity-accounted M-Net/SuperSport - Additional stake (*) M-Net/SuperSport - Additional stake (*) Dec 2007 Dec 2007 n/a n/a 4,138 4,138 250 250 40% 40% 100% 100% Consolidated Consolidated Cloakware Dec 2007 $74 505 503 100% 100% Consolidated Mail.ru - Additional stake Oct 2007 $26 175 175 2.6% 32.6% Equity-accounted MFD (German mobile TV) Jul 2007 € 11 114 114 37.5% 37.5% Equity-accounted ACL Wireless Jun 2007 $12 87 87 30% 30% Equity-accounted IDWay Jun 2007 € 11 98 97 100% 100% Consolidated Nimbuzz May 2007 € 4 40 40 25% 25% Equity-accounted Paarl Media - Additional stake Apr 2007 n/a 96 96 2.5% 95% Consolidated Other Various $38 265 255 n/a n/a Consolidated TOTAL 22,257 17,449 (*) M-Net/SuperSport settlement: R250m in cash and 21.6m Naspers N shares @ ZAR180/share 17

Net cash flow Mar '07 Mar '08 ZARm ZARm Free cash flow 2 182 2 223 Net investments (5 292) (17 152) Net dividends (443) (691) Discontinued operations - 51 BEE transactions 821 - Interest Interest 110 110 588 588 (2 622) (14 981) Net financing 7 158 9 917 Net cash inflow/(outflow) 4 536 (5 064) Net cash/(debt) balance 10 490 (3 573) South African Rand R2 364 1 825 Foreign currency $1 113 (664) 18

Foreign exchange risk US$ Forward Exchange Cover • Foreign currency cost exposure in SA businesses US$ US$ ZARm • Mainly transponder leases and m rate content rights • 80% - 100% of foreign currency FY08 96 6.87 660 exposure covered for up to two exposure covered for up to two FY09 FY09 167 167 7.56 7.56 1 267 1 267 years FY10 147 8.01 1 181 • Increasing offshore earnings reducing net foreign currency exposure 19

Highlights Financial overview Operational overview Outlook Appendix

Naspers Internet Strategy – community based focus Social Networks Commerce QQ, Mail.ru, Gadu Gadu, Allegro, Ricardo, QQ, ibibo, MXit, Kalahari.net ` Community Communication Content QQ, Gadu Gadu, QQ, Mail.ru, 24.com, MXit, Nimbuzz Sanook! 21

Internet Growth Drivers 69 50 USA 1 60 UK 45 2 56 12 Czech 6 38 Hungary 17 2 34 14 Poland 7 22 Brazil Brazil 2 2 6 21 Russia 3 8 15 China 2 8 12 Ukraine 2 7 9 South Africa 1 3 5 India 2 7 % 0 10 20 30 40 50 60 70 80 Real GDP growth Broadband penetration Internet penetration 22

Internet Assets 23