Results presentation For the 6 months ended 30 September 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 our 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
Highlights Robust revenue growth 32% Revenue growth – 19% organic and rest acquisitive Strong pay-TV 171,000 net adds, or 15% growth YoY in total subs subscriber growth Cost of growing subscriber platforms and developing products and services Margin contraction Allegro/ Ricardo Allegro/ Ricardo Performing above expectations (Tradus) Higher finance costs A consequence of debt raised to pay for the Tradus acquisition Significant contribution Equity-accounted earnings up 221% to R405m from associates Sold our share of Netmed for €376m (R4.3bn), MWEB Africa to be sold for Selective disposals US$63m (R610m) 4
Portfolio Analysis: Revenue* Segmental revenue split - 1H09 (ZARm) 1H08 1H09 8,000 6,988 7,000 6,000 5,454 4,925 5,000 4,088 4,000 3,121 3,000 2,000 1,249 1,000 725 481 0 Pay TV Internet Print Technology *Assuming all equity-accounted investments are proportionately consolidated. 5
Portfolio Analysis: Operating Profit* Segmental EBITA contribution - 1H09 (ZARm) 2,019 1,995 1H08 1H09 2,000 1,700 1,400 1,100 759 800 487 500 388 185 200 -38 -49 Pay TV Internet Print Technology -100 *Assuming all equity-accounted investments are proportionately consolidated. 6
Financial Highlights 1H08 (Sept’07) 1H09 (Sept’08) Revenue (ZARbn) Revenue (Rbn) EBITDA (ZARbn) Up 32% Up 11% 12.7 2.8 2.5 9.6 Core Headline Earnings (ZARbn) Core HEPS (ZAR) Up 3% Down 4% 1.76 1.71 4.95 4.76 3.43 7
Business focus Internet Pay TV Print Technology 8
Highlights Financial overview Operational overview Outlook Appendix
Summary income statement Sept '07 Sept '08 ZARm ZARm Revenue 9 587 12 652 Operating profit* 2 094 1 898 Finance costs 554 (95) Share of equity accounted results 126 405 Impairment of equity investments Impairment of equity investments (68) (68) (216) (216) Profit on sale of investments 0 34 Income before taxation 2 706 2 026 Taxation (883) (837) Profit after taxation 1 823 1 189 Core headline earnings 1 706 1 763 Core headline EPS 495 476 * After amortisation charges 10
Revenue Revenue Contribution (ZARm) YoY ZARbn Sept '07 Sept '08 Change 7,000 1H08 1H09 Revenue 9.6 12.7 32% 6,000 5,000 • Organic growth 19%; acquisitive 13% 4,000 6,981 • Internet revenue up 180% 3,000 5,447 • Pay TV revenue up 28% 2,000 3,108 • Advertising revenue steady +5% 2,998 1,000 1,831 • Subscription annuity income 49% of total • Subscription annuity income 49% of total 654 654 725 725 481 0 revenue Pay-TV Internet Technology Print Revenue Growth (%) Revenue Split: Type (%) 1H08 60% Subscription (49%) 1H09 180% Advertising (16%) 50% E-commerce (9%) Other (15%) 40% Technology (6%) Printing (5%) 30% 51% 20% 28% 22% 22% 20% 10% 14% 4% 0% Pay-TV Internet Technology Print 11
Operating margins EBITA Contribution (ZARm) YoY ZARbn Sept '07 Sept '08 Change 1H08 2,000 1H09 Operating profit* 2.2 2.4 7% 1,700 Operating margin 23.0% 18.7% 1,400 * Before amortisation, other gains/losses 1,100 2,099 2,044 800 • Pay TV margin decline 500 – building out subscriber base 113 200 • Internet margins up • Internet margins up 303 -49 -49 276 276 -38 -38 -49 -49 – boosted by Allegro -100 Pay-TV Internet Technology Print • Technology EBITA Margins – improved Irdeto sales offset by Entriq 1H08 development costs 50% 1H09 • Print margins 40% – impacted by decline in adspend 30% • Development costs up 16% YoY to R638m 20% 38% 30% • Depreciation increased 42% YoY to R433m 10% 10% 9% 6% 0% -7% -7% -8% -10% Pay-TV Internet Technology Print 12
South African Pay TV Margins South Africa – Programming costs • Operating margin declined from 43% to 36% Programming as % of subs revenue • Impact of strategy to broaden/deepen 60% subscriber base 50% 40% • Additional costs taken on: 30% – Decoder subsidies R165m 20% – Content costs R180m – Customer service centres R63m 10% – Licence fees R28m 0% 0% 31-Mar-05 30-Sep-05 31-Mar-06 30-Sep-06 31-Mar-07 30-Sep-07 31-Mar-08 30-Sep-08 • Impact: South Africa – Decoder subsidies – Added 79,000 additional equated subscribers – Revenue earned during period R96m Decoder cost as % of decoder sales 60% – Annualised future revenue stream R380m 50% 40% 30% 20% 10% 0% 31-Mar-05 30-Sep-05 31-Mar-06 30-Sep-06 31-Mar-07 30-Sep-07 31-Mar-08 30-Sep-08 13
Development costs • Pay-TV: – R60m for mobile TV Sept '07 Sept '08 YoY ZARm ZARm Change – Broadband content R129m • Internet: Pay-TV 114 198 74% – R46m for ibibo – R44m for 24.com Internet 135 183 36% – – R25m for Allegro/Ricardo start-ups R25m for Allegro/Ricardo start-ups • Technology: Technology 161 158 (2%) – Irdeto R63m Print 141 99 (30%) – Entriq R95m • Print: Total 551 638 16% – Relates mainly to new titles 14
Equity accounted results Sept '07 Sept '08 YoY ZARm ZARm Change Tencent 226 504 123% Abril 40 71 78% Mail.ru 20 38 90% Other (5) (29) - Contribution to core 281 584 108% headline earnings 15
Income Statement – Special Items Intangible amortisation increased to ZAR448m (2007: ZAR91m) due to Amortisation accounting for recent acquisitions Net interest cost of ZAR133m, versus interest income of ZAR268m prior Finance costs period. Relates mainly to cost of Tradus acquisition Impairments Mainly withdrawal from German mobile TV market Discontinued Profit of ZAR2.6bn on the sale of NetMed operations 16
Core headline earnings Sept '07 Sept '08 ZARm ZARm Headline earnings 1 588 1 272 Treasury-settled share scheme charges 33 124 159 159 363 363 Amortisation of intangible assets Amortisation of intangible assets Fair value adjustments & currency (71) 125 translations Discontinued operations (3) (121) Core headline earnings 1 706 1 763 17
Free cash flow Sept '07 Sept '08 ZARm ZARm Operating cash flow 2 146 2 380 Capex (519) (630) Finance leases (166) (195) Tax (630) (896) Investment income 72 100 Free cash flow 903 759 18
Net cash flow Sept '07 Sept '08 ZARm ZARm Free cash flow 903 759 Net investments (493) 3 795 Net dividends (621) (777) Discontinued operations 34 87 Net finance costs 321 (81) Net cash flow 144 3 783 19
Net Consolidated Debt Sept '08 ZARm Comprises: Net cash – South Africa 1 687 Net debt – offshore ($221m) Net debt – offshore ($221m) (1 843) (1 843) Closing net debt (156) negligible Group gearing 20
Foreign exchange risk • Hedging policy – Pay-TV: cover at least 80% of rolling 2 year net inputs – Print: cover 12 months rolling input costs • Annualised net foreign input costs – Pay-TV US$180m – Print EUR66m US$ Forward Exchange Cover US$ Forward Exchange Cover EUR Forward Exchange Cover EUR Forward Exchange Cover US$m US$ rate EURm EUR rate H2 FY09 81 7.88 H2 FY09 36 12.34 FY10 39 12.14 FY10 174 8.27 FY11 to date 81 9.21 • We have foreign denominated earnings and cash flows 21
Highlights Financial overview Operational overview Outlook Appendix
The world is a different place Global Indices: 1-Year Performance Since we last reported … – Values of media worldwide have halved – Access to credit extremely difficult 120 – Real economy under pressure 100 Rebased to 100 Naspers adapting to these changes by: 80 • Scaling back and cutting costs 60 – Print: Reducing headcount and capex, closing titles 40 – Technology: 20 20 Entriq integrated with Irdeto MediaZone scaled back 0 Jan-08 Feb-08 Apr-08 Jun-08 Jul-08 Sep-08 Nov-08 • Investing in areas of growth S&P 500 FTSE 100 MSCI (EMERGING MARKETS) – Pay television: Source: Merrill Lynch Remarkably resilient Investment to deepen/broaden subscriber base – Internet: Continues to grow despite weakening economy Tradus exceeding expectations Our strategy – further investing 23
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