Naspers Limited Class N · JSE:NPN
Naspers Limited Class N — H1 FY2021 Earnings Presentation
42 slides from Naspers Limited Class N's earnings presentation, November 2020
Slide 1: Detailed Financials
Detailed Financials For the six months ended 30 September 2020
Slide 2: Important information
Important information This report contains forward-looking statements as defined in the United States Private Securities Litigation Reform Act of 1995 concerning our financial condition, results of operations and businesses. These forward-looking statements are subject to a number of risks and uncer
Slide 3: Operations
Drosus Operations
Slide 4: Classifieds: Q1 impacted by lockdown restrictions, Q2 strong recovery
Classifieds: Q1 impacted by lockdown restrictions, Q2 strong recovery A global classifieds Core classifieds: OLX Group Core Classifieds : Average revenue/ leader and innovator internet user (ARPIU)2,3 monetisation countries (US$) • The Covid-19 lockdown restrictions with 19 core impacted OLX’s opera
Slide 5: Classifieds: Quick actions accelerated recovery
Classifieds: Quick actions accelerated recovery Avito: • MAU’s held up well, supported by Poland Brazil product improvement and marketing investments. Investing to continue 24% 10% 21% market share gains and enhance the # app MAU's 24% # app MAU's 10% # app MAU's 18% 9% platform, leading to a lower
Slide 6: Transactions: Lockdown restrictions caused closure of inspection centres
Transactions: Lockdown restrictions caused closure of inspection centres in March with gradual reopening since May Vehicles transacted (‘000)2: Transactions (Tx): • OLX continued to integrate its horizontal -28% platforms in LatAm, India and Indonesia with FCG. This improves the end-to-end value pro
Slide 7: Food Delivery: Covid-19 impact differed by region
Food Delivery: Covid-19 impact differed by region • Globally, food delivery demand has Leadership positions in 46 of our markets Orders (‘m)1 increased during the lockdowns as 53% consumers sought convenience. • Company performance has varied depending on restrictions during the lockdowns in their c
Slide 8: Food Delivery: iFood has seen impressive order growth
Food Delivery: iFood has seen impressive order growth Orders (‘m)1 Restaurant partners (‘000): • In Brazil, where food delivery companies are deemed essential services, iFood continued its rapid growth as it provided a vital platform for restaurants 111% 96% to continue operating. • With on-premises
Slide 9: Food Delivery: Delivery Hero and Swiggy
Food Delivery: Delivery Hero and Swiggy Delivery Hero (DH): • DH has been expanding its convenience/ grocery delivery business via its D-mart model. DH now has 254 D-mart stores. A leader in 44 of 49 markets A leader in India • DH acquired Glovo’s LatAm operations, adding 5 new markets and consolida
Slide 10: Payments & Fintech: Strong growth globally
Payments & Fintech: Strong growth globally 20 High growth markets Number of Transactions (‘bn)1 • Payments & Fintech reported strong results benefiting from secular trends of 25% consumers moving and transacting online, and more online transactions settled through alternative forms of payment rather
Slide 11: Etail: eMAG benefiting from a shift to online
Etail: eMAG benefiting from a shift to online • eMAG has performed well during the GMV (US$’m)1 Covid-19 pandemic, benefitting from high online demand as lockdown 75% (62%) restrictions accelerate the transition from offline retail to online. • Despite the logistical challenges presented by Covid-19
Slide 12: Ventures: Significant demand drove a strong Edtech performance
Ventures: Significant demand drove a strong Edtech performance • Edtech has gained significant traction Target Prosus since the Covid-19 pandemic. Group Segment Portfolio Significant growth this year • The global education and training market is expected to reach US$10tr by 20302. • We have invested
Slide 13: M&A
Drosus M&A
Slide 14: M&A focused on core segments
M&A focused on core segments • Prosus invested US$589m (1H FY20: Investment to scale our core segments in 1H FY21 US$374m) in 1H FY21. Significant investments include: - Movile (US$158m) - letgo/OfferUp (US$100m) - EMPG (US$75m) US$589m - Eruditus (US$60m) - Remitly (US$52m) - FCG (US$34m) - Mail.ru
Slide 15: Financials
Drosus Financials
Slide 16: Summary financials
Summary financials Revenue (US$’bn)1,2 Trading profit (US$’bn) 1,2 28% (32%) 39% (43%) 12.7 2.7 9.9 1.9 1H FY20 1H FY21 1H FY20 1H FY21 Core headline earnings (US$’bn)2,3 Free cash flow (US$’m) 28% (29%) 2.2 370 1.7 14 1H FY20 1H FY21 1H FY20 1H FY21 1 Results reported on an economic-interest basis,
Slide 17: Accelerated ecommerce revenue growth
Accelerated ecommerce revenue growth • Ecommerce revenue increased 51% YoY, Ecommerce revenue growth by core segments (%)1 Q1 FY21 vs Q2 FY211 accelerating 23 ppt YoY, with strong growth exhibited in Q1 and Q2. The Covid-19 lockdowns impacted Q1 more 1H FY20 Q1 Q2 than Q2. 141% 1H FY21 • Q2’s ecomme
Slide 18: Classifieds recovered strongly from impacts of the pandemic
Classifieds recovered strongly from impacts of the pandemic Classifieds: Revenue (US$’m)1 Trading profit/(loss) (US$’m)1 Quarterly revenue growth (%)1 • Q1 was marked by the full impact of the lockdown restrictions in key markets and Investment in a commensurate drop in revenue and Transactions Q1 Q
Slide 19: Food Delivery doubled revenues and improved margin with scale
Food Delivery doubled revenues and improved margin with scale • Strong revenue growth of 141% YoY, Revenue (US$’m)1 Trading profit/(loss) (US$’m)1 Quarterly revenue growth (%)1 was driven by iFood and Delivery Hero despite Swiggy facing headwinds in India. Q1 Q2 • iFood delivered strong revenue grow
Slide 20: Payments & Fintech accelerated revenue growth
Payments & Fintech accelerated revenue growth • GPO reported accelerated revenue Revenue (US$’m)1 Trading profit/(loss) (US$’m)1 Quarterly revenue growth (%)1 growth driven by an increased number of transactions as people shifted online and New initatives local regulations supported digital Core Pay
Slide 21: Etail: eMAG's strong revenue growth drove improved profitability
Etail: eMAG’s strong revenue growth drove improved profitability • eMAG had strong growth over the past Revenue (US$’m)1 Trading profit/(loss) (US$’m)1 Quarterly revenue growth (%)1 six months, with all businesses performing well. • Sales may subside somewhat when markets emerge from the Covid-19 cr
Slide 22: Ecommerce "Other"
Ecommerce “Other” Prosus Ventures: Revenue (US$m)1 Trading loss (US$m)1 • Prosus Ventures’ revenue grew strongly at 83% YoY (49% YoY in local currency excluding M&A) accelerated by growth in Edtech. Corporate costs 6% (35%) Ecommerce “Other” includes: • The Group views corporate costs as • Prosus Ve
Slide 23: Social & internet platforms delivering robust performance
Social & internet platforms delivering robust performance Tencent • Tencent grew revenue 28% YoY for the 9 months to September 2020 driven by: Tencent revenue (RMB’m)1 Mail.ru revenue (RUB’m)2 • Strong smartphone gaming led by popular, established games in China 28% and internationally; 20% 377 289
Slide 24: Segmental detail
Segmental detail1 Revenue EBITDA Trading profit 1H FY20 1H FY21 1H FY20 1H FY21 1H FY20 1H FY21 Ecommerce 1 908 2 608 (355) (239) (416) (316) - Classifieds 587 628 59 39 37 12 - Food delivery 306 610 (273) (166) (283) (187) - Payments & Fintech 199 252 (35) (34) (38) (38) - Etail 525 965 (1) 36 (15)
Slide 25: Change to settle SARs in cash impacted trading profit
Change to settle SARs in cash impacted trading profit • As disclosed at the end of FY20, effective The accounting impact of settlement in 1 April 2020, the Group changed the way Increase in SBC included in TP (US$m)1 cash vs shares it settles SARs. Settlement of SARs is done directly in cash rather
Slide 26: Profitable businesses contributed significantly to central cash flows
Profitable businesses contributed significantly to central cash flows Consolidated trading profit from profitable ecommerce Sources of free cash inflow (US$m)2,3 • Improved Ecommerce profitability, businesses (US$m)1,2 driven by Payments & Fintech and Etail resulted in greater contributions to 30% o
Slide 27: Food Delivery drives decrease in development spend
Food Delivery drives decrease in development spend Consolidated development spend (US$m)1 Economic interest development spend (US$m)1 • Consolidated development spend decreased 46% YoY as lower levels of investment were required in iFood and -23% (-23%) eMAG turned profitable. • Prosus’s proportiona
Slide 28: FCF reflects strong operational performance
FCF reflects strong operational performance US$m 1H FY20 1H FY21 • The Group’s free cash flow increased to EBITDA (132) (55) US$370m reflecting: − Improved Food Delivery margins; Non-cash items 53 112 − Improved profitability and positive Working capital (including merchant cash, excluding share pur
Slide 29: Prosus company sources of cash and commitments
Prosus company sources of cash and commitments • Dividends from associates and US$m 1H FY20 1H FY21 Dividends to HoldCo (US$m) subsidiaries increased by 19%. • Classifieds paid a dividend to the HoldCo Cash remitted to/generated at HoldCo level: 19% of US$120m, a 10% increase YoY. There 578 is a 6-m
Slide 30: Significant financial flexibility to execute our value creating strategy
Significant financial flexibility to execute our value creating strategy Debt maturity profile (US$bn) Debt • US$1.2bn 10yr bond issued July 2015 (5.5% coupon). • US$1bn 10yr bond issued July 2017 (4.85% coupon). • US$1.25bn 10yr bond issued January Undrawn 2020 (3.68% coupon). Group RCF Bond Bond U
Slide 31: Summarised income statement
Summarised income statement • Detail on net finance cost and share of equity-accounted results can be found on page 31 & 32. US$m 1H FY202 1H FY21 • 1H FY21 net gains on acquisitions and 1 Revenue 9 925 12 690 disposals includes gains of US$114m on the merger of Dubizzle with EMPG and Less: Equity-a
Slide 32: Finance costs
Finance costs Interest received decreased due to lower US$m 1H FY201 1H FY21 cash and short-term cash investment balances as the Group deployed capital to grow its core segments. Additionally, average interest rates declined YoY. Interest income 118 59 Loans and bank accounts 118 43 Prosus raise
Slide 33: Share of equity-accounted results
Share of equity-accounted results • The increase of US$603m (+27% YoY) in US$m 1H FY20 1H FY21 share of equity-accounted results relates mainly to: Tencent1 2 237 3 135 − Increased Tencent profits; Mail.ru1 42 (20) − MakeMyTrip losses reduced as the Group no longer equity accounts this Delivery Hero
Slide 34: Core headline earnings drivers
Core headline earnings drivers Incremental core headline earnings drivers, YoY (US$m)1 • Core headline earnings (which excludes once-off and non-operating items such as amortisation of intangible assets recognised in business combinations, 81 (78) etc.), is not defined under IFRS, but is 28% (29%) (
Slide 35: Core headline earnings reconciliation
Core headline earnings reconciliation • Fair-value adjustments and currency US$m 1H FY201 1H FY21 translation differences were impacted by (amongst other items) gains on financial instruments of US$832m recorded by Tencent. Headline earnings from continuing operations 1 606 2 429 • The diluted earni
Slide 36: Contribution by associates and joint ventures
Contribution by associates and joint ventures Company PPA IFRS Other Core HE • Equity-accounted results include the 1H FY21 (US$m) Group’s share of the earnings of its results adjustments results adjustments Contribution associates and JV’s. Tencent1 3 135 - 3 135 (518) 2 617 • In arriving at core h
Slide 37: Tencent's contribution to core headline earnings
Tencent’s contribution to core headline earnings 1H FY20 1H FY21 Tencent: Jun’19 Prosus’s share Tencent: Jun’20 Prosus’s share (RMBm)1 (US$m) (RMBm)1 (US$m) Tencent profit attributable to equity holders 51 346 2 304 62 003 2 716 Adjustments to get to Prosus’s core headline earnings: (6 891) (316) (2
Slide 38: Current assets and liabilities
Current assets and liabilities • Accrued expenses & other current Current assets (US$m) FY20 1H FY21 Current liabilities (US$m) FY20 1H FY21 liabilities increased US$448m driven by an increased share-based payment liability and capital repayment/dividend Inventory 213 249 Current portion of long-ter
Slide 39: Appendix
Drosus Appendix
Slide 40: Group portfolio
Group portfolio Ecommerce Social & internet platforms 31% Classifieds Payments & Fintech Food delivery Etail Ventures 100%1 99% 92% 80% 19% 27% 100% 99% 61%2 42% 15% 39% 72% 21% 21% 38% 90% 40% 44% 91% 99% 11% 79% 16% 19% 12% 23% 21% 9% Organogram depicts effective percentage holdings in major entit
Slide 41: Glossary
Glossary ARPIU: Total revenue for OLX Core Classifieds monetisation countries, KPI: Key performance indicator divided by the total number of internet users in those countries M&A: Mergers and acquisitions CAC: Customer acquisition cost MENA: Middle East and North Africa Core HE: Core hea
Slide 42: If you require any further information, please visit our website
If you require any further information, please visit our website www.prosus.com or alternatively email Eoin Ryan (Head of Investor Relations) at [email protected]