Naspers Limited Class N · JSE:NPN
Naspers Limited Class N — FY2009 Earnings Presentation
40 slides from Naspers Limited Class N's earnings presentation, June 2009
Slide 1: Financial Results Presentation
Financial Results Presentation For the year ended March 2009
Slide 2: Important information
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 i
Slide 3: Agenda: FY09 Group Highlights
FY09 Group Highlights Key Messages FY09 Results Performance by business Outlook Appendix 3
Slide 4: FY09 Group highlights
FY09 Group highlights •Revenue increased 30% and EBITA up 21% Financial •Core headline earnings up 9% to R4.4bn •Dividend up 15% to R2.07 per share •Allegro performing ahead of expectations; revenue growth 47% Operational •683,000 new gross pay-TV subscribers – 26% growth YoY •Print and technology i
Slide 5: Financial Highlights
Financial Highlights March 08 March 09 Revenue Revenue(ZARbn) (Rbn) EBITDA (ZARbn) EBITDA Margin (%) Up 30% Up 23% Down 1% 6.0 26.7 24 23 20.5 4.9 Core Headline Earnings (ZARbn) Core HEPS (ZAR) DPS (ZAR) Up 9% Up 4% Up 15% 2.07 4.4 11.79 1.80 11.30 4.0 5
Slide 6: Agenda: Key Messages
FY09 Highlights Key Messages FY09 Results Performance by business Outlook Appendix 6
Slide 7: Key messages
Key messages 1 Diversified revenue streams 2 Emerging market focus 3 Long-term growth 7
Slide 8: Diversified revenue streams makes the group more defensive
1 Diversified revenue streams makes the group more defensive FY09 Revenue by business* FY09 Revenue by type* Pay TV (44%) Subscription (41%) Internet (21%) IM & games (8%) Technology (4%) e-Commerce (7%) Print Media (31%) Advertising (16%) Printing & distribution (12%) Technology (4%) Book publishin
Slide 9: Emerging market focus – better growth prospects
2 Emerging market focus – better growth prospects 9
Slide 10: Long-term growth enhanced by internet investments
3 Long-term growth enhanced by internet investments Internet revenue (ZARm)* 8,000 Mar 07 7,256 Mar 08 7,000 Mar 09 6,000 5,000 4,000 3,037 3,000 2,078 2,000 1,000 0 * Based on economic interest, i.e. assuming all investments are proportionately consolidated 10
Slide 11: Agenda: FY09 Results
FY09 Highlights Key Messages FY09 Results Performance by business Outlook Appendix 11
Slide 12: Summary income statement
Summary income statement 1 Mar 08 Mar 09 EBITDA growth accelerated - ZARm ZARm +23% YoY (FY08 +15%) Revenue 20,518 26,690 2 Affected by amortisation charges of EBITDA 4,900 6,026 1 R1.25bn (FY08 R375m) relating mainly to the acquisition of Allegro and Ricardo Operating profit 3,878 3,783 2 3 Finance
Slide 13: 30% revenue growth, stronger than expected
30% revenue growth, stronger than expected ZARm Mar 08 Mar 09 % Change Revenue Growth (%) Mar 08 60% Revenue 20,518 26,690 30% Mar 09 50% 136% • Organic growth 19%, rest acquisitive 40% • Internet resilient; revenue more than doubled 30% 42% • Pay-TV growth 29%; added 683,000 gross subscribers 20% 4
Slide 14: Group operating margin contracted marginally
Group operating margin contracted marginally ZARm Mar 08 Mar 09 % Change Pay-TV: Programming costs (ZARm) Operating profit* 4,238 5,116 21% 6,000 Operating margin 20.7% 19.2% 5,018 5,000 * Before amortisation, other gains/losses 4,000 3,694 3,169 3,000 2,807 • Pay-TV margin declined from 34% to 32%
Slide 15: Development costs essential for long-term growth
Development costs essential for long-term growth Mar 08 Mar 09 1 % Change R131m for Allegro/Ricardo ZARm ZARm R98m for ibibo 1 R77m for 24.com Internet 291 483 66% R50m for instant messaging Pay-TV 205 196 -4% 2 2 R157m for mobile TV Technology 307 343 12% Print 326 189 -42% 33 3 Media24 R122m, main
Slide 16: Equity accounted income growing strongly
Equity accounted income growing strongly 1 Tencent experienced robust online game Mar 08 Mar 09 sales and strong growth in active IM user % Change accounts ZARm ZARm Tencent 560 1,197 114% 1 2 Abril 104 249 139% 2 Abril benefited from Brazilian economy and deleveraged balance sheet Mail.ru 25 62 148
Slide 17: Free cash flow up 18%
Free cash flow up 18% Mar 08 Mar 09 ZARm ZARm 1 Operating cash flow 5,104 5,814 Pay-TV R486m Internet R220m Capex -1,221 -1,227 1 Technology R107m Print R414m Finance leases -340 -450 2 2 Tax -1,553 -1,798 Increased costs of additional transponders leased Investment income 71 98 Free cash flow (cont
Slide 18: Net consolidated debt – group virtually ungeared
Net consolidated debt – group virtually ungeared Mar 09 ZARm 1 Consists mainly of Allegro/ Ricardo Net cash – South Africa 1,910 funding (US$600m) less surplus cash held offshore Net debt – offshore (US$298m) -2,837 1 2 Excluding transponder leases Closing net debt -927 of R1.2bn, seen as operating
Slide 19: Foreign exchange risk reduced through hedging
Foreign exchange risk reduced through hedging US$ Forward Exchange Cover US$m US$ rate • Hedging strategy FY10 178 8.09 – Pay-TV: long-term commitments, cover 100% of rolling 12 month net inputs FY11 182 10.20 – Print: short-term commitments; cover 12 months rolling input costs EUR Forward Exchange
Slide 20: Agenda: Performance by business
FY09 Highlights Key Messages FY09 Results Performance by business Outlook Appendix 20
Slide 21: Naspers Internet Strategy – community based focus
Naspers Internet Strategy – community based focus Social Network Commerce Tencent, Mail.ru, Allegro, Ricardo, ACL Wireless, Tencent, MXit, Gadu-Gadu, Buzzcity, Kalahari.net, ibibo, Compera ibibo Communication Tencent, Mail.ru, Community Games Gadu-Gadu, MXit, Tencent, Nimbuzz, Compera, Mail.ru, ACL
Slide 22: Internet: Allegro & Ricardo
Internet: Allegro & Ricardo Performing ahead of expectations EUR’m Mar 08 Mar 09 % Change • Contributed ZAR474m to group EBITA Revenue 106.6 156.3 47% • CEE countries growing strongly EBITA 32.9 38.7 18% • Western European countries flat • Margins affected by start-ups EBITA margin – total 31% 25% •
Slide 23: Allegro
Allegro Auctions: Apr 2008 – Mar 2009 59BN page views 118m transactions €1.4bn GMV* €112m revenue Auctions: Apr 2007 – Mar 2008 47BN page views 79m transactions €950m GMV* €62m revenue *GMV = gross merchandise value; **information for Allegro auction platform only Monetisation rate (%) March 2009 –
Slide 24: Internet: Tencent (China)
Internet: Tencent (China) Powering ahead RMB’m* Mar 08 Mar 09 % Change • Contribution to FY09 core headline earnings ZAR1.2bn (FY08 R615m) Revenue 3,821 7,155 87% • Revenue growth strong EBITA 1,635 3,246 99% • Micropayments proving resilient EBITA margin 43% 45% • Key operational statistics at 31 M
Slide 25: Internet: mail.ru (Russia)
Internet: mail.ru (Russia) Growing strongly, despite economy RUR’m* Mar 08 Mar 09 % Change • Acquired additional 10% in Dec 08 Revenue 1,316 1,869 42% • Contribution to FY09 core headline earnings ZAR87m (FY08 R49m) EBITA 865 1,004 16% • Margins affected by hard currency costs EBITA margin 66% 54% •
Slide 26: Pay-TV: South Africa
Pay-TV: South Africa Proving its resilience Mar 08 Mar 09 % Change • FY09 gross subscriber growth 23% Gross subscribers 1,948 2 ,401 23% • 453,000 gross additions YoY ZARm – Premium +8% ZARm – PVR +16% Revenue 8,567 10,335 21% – Compact +82% EBITA 3,392 3,798 12% EBITA margin 40% 37% • Advertising u
Slide 27: Pay-TV: Sub-Saharan Africa
Pay-TV: Sub-Saharan Africa Record growth despite competition Mar 08 Mar 09 % Change • FY09 gross subscriber growth 33% Gross subscribers 686 916 33% • 230,000 gross additions YoY – Premium +16% ZARm ZARm – PVR +58% Revenue 3,056 4,550 49% – Compact +84% EBITA 1,008 1,562 55% – Family +86% EBITA marg
Slide 28: Technology
Technology Operations being repositioned ZARm Mar 08 Mar 09 % Change Revenue 1,081 1,514 40% EBITA -168 -132 21% • Business affected by current economic downturn • Irdeto shipped 15m units in FY09 (10.7m) • Integrated all technology businesses 28
Slide 29: Print – South Africa
Print – South Africa Advertising hit by economic downturn Print Mar 08 Mar 09 % Change • Consumer spending under pressure Revenue 5,414 5,614 4% • Advertising revenue growth slowed to 2% EBITA 670 618 -8% • Reduced headcount by 10% EBITA margin 12% 11% • Margins affected by ~R80m one-off restructuri
Slide 30: Print – Abril
Print – Abril Attractive economy Brazil (Abril) BRL'm Mar 08 Mar 09 % Change • Naspers own 30% Revenue 2,396 3,015 26% • Contribution to core headline earnings increased to R414m (FY08 R150m) EBITA 386 371 -4% • Deleveraging benefitting bottom line – interest expenses EBITA margin 16% 12% down 83% •
Slide 31: Agenda: Outlook
FY09 Highlights Key Messages FY09 Results Performance by business Outlook Appendix 31
Slide 32: Outlook
Outlook Diversified revenue •Resilient businesses in growing markets streams •Some risks due to pay-TV competition, regulation and slower consumer spending Emerging market •Still providing better growth prospects relative to developed markets focus •Expansion anticipated in Asia, Central & Eastern E
Slide 33: Agenda: Appendix
FY09 Highlights Key Messages FY09 Results Performance by business Outlook Appendix 33
Slide 34: Pay-TV subscribers
Pay-TV subscribers Gross subscribers Mar 08 Mar 09 Equated subscribers Mar 08 Mar 09 Africa Africa SA - analogue 171,583 139,944 SA - analogue 156,488 128,376 SA - digital 1,776,430 2,261,547 SA - digital 1,413,054 1,610,434 Total S.A. 1,948,013 2,401,491 Total S.A. 1,569,542 1,738,810 Sub-Saharan A
Slide 35: Consolidated income statement
Consolidated income statement ZAR’m US$’m Mar 08 Mar 09 Mar 08 Mar 09 Revenue 20,518 26,690 2,867 3,038 Operating profit 3,878 3,783 542 430 Finance Costs 1,005 (303) 140 (34) Share of equity accounted results 654 1,473 91 168 Profit on sale of investments 16 36 2 4 Impairment of equity accounted in
Slide 36: Core headline earnings
Core headline earnings Mar 08 Mar 09 ZARm ZARm Headline earnings 3,806 3,065 1 Treasury-settled share scheme charges 47 258 Increased amortisation mainly the result of the Allegro/Ricardo 410 958 1 acquisition in March 2008 Amortisation of intangible assets Fair value adjustments & currency -71 279
Slide 37: Capital expenditure
Capital expenditure Capital expenditure Mar 08 Mar 09 Land, buildings & plant 517 344 Transmission equipment 310 323 1 Computer & office equipment 216 302 1 Increased costs relate to investment in call centre capacity to service Software 158 182 growing subscriber base Other (including vehicles, fur
Slide 38: Ungeared balance sheet supports acquisitive expansion
3 Ungeared balance sheet supports acquisitive expansion Significant FY09 acquisitions – mainly bolt-on purchases Total cost Total cost Percentage Effective Company Country Date Accounting method FC’m R’m acquired holding mail.ru Russia Dec-08 $100 1,030 10% 43% Equity accounted Vatera.hu Hungary Sep
Slide 39: Group holdings by business and region
Internet Pay TV Technology Print Eastern Europe Western Europe South Africa Technology Newspapers & Magazines 97% 100% 80% 100% 85% China Russia Printing & Distribution 35% 43% 95% India Poland Sub-Sahara Africa Publishers & Agents 94% 100% 100% 100% South Africa South Africa Brazil, Magazines & Edu
Slide 40: Investor Relations contact details
Investor Relations contact details Meloy Horn Office: +27 11 289 3320 Mobile: +27 82 7727 123 E-mail: [email protected] Website: www.naspers.com 40