Naspers Limited Class N · JSE:NPN
Naspers Limited Class N — H1 2008 Earnings Presentation
32 slides from Naspers Limited Class N's earnings presentation, Nov 27, 2007
Slide 1: Results presentation
Results presentation For the six months ended 30 September 2007 27 November 2007 1
Slide 2: Important information
Important information • This presentation contains forward-looking statements. While these forward-looking statements represent our judgements and future expectations, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from o
Slide 3: Highlights
Highlights Operational overview Financial overview ● Macroeconomic conditions ● Revenue growth – 19% ● Pay TV subscribers grew by net 109 000 ● Core headline earnings growth – 32% ● Investments kicking in ● Free cash flow R1 billion Investment / Development focus ● Investments, focussed mainly on el
Slide 4: Corporate Activity
Corporate Activity ● Investments committed to date – R2.1 billion ($305m) ● These include the following: • Gadu Gadu • Afsat • Mail.ru - additional 2.6% • 30% ACL Wireless • 25% Nimbuzz ● M-Net / SuperSport approved - 20.9 million shares + R250m cash ● Private education divestment 4
Slide 5: Global footprint
Global footprint Netherlands Technology & Russia Poland internet Internet Internet China Greece Internet, Pay TV technology & print India San Diego Internet Technology Thailand Internet Africa Brazil Pay TV, print, Print & internet internet Pay TV Mobile TV Internet Print Technology Broadband servic
Slide 6: Financial overview
Financial overview 6
Slide 7: Revenue analysis
Revenue analysis Sept ’07 Sept ’06 R bn R bn Total 10,5 8,8 +19% Electronic media 7,5 6,2 +21% Print media 3,0 2,6 +14% ● Pay TV subscribers: 109 000 net growth ● Advertising revenue: 15% growth 7
Slide 8: Operating margins
Operating margins Sept ’07 Sept ’06 R bn R bn Revenue 10,5 8,8 +19% Operating profit before 2,4 1,9 +22% amortisation, other gains/losses Operating margin 22.7% 22.0% ● Improved operating margin ● Business development costs R479m (2006: R449m) 8
Slide 9: Business Development costs
Business Development costs Sept ‘07 Sept ’06 Rm Rm Pay TV / Mobile 114 129 Internet 135 71 Technology / Broadband 89 123 Print 141 126 Total 479 449 9
Slide 10: Summary Income Statement
Summary Income Statement Sept ‘07 Sept ’06 Rm Rm Revenue 10 497 8 825 Operating profit 2 265 1 975 Finance income/(costs) 548 (458) Share of equity accounted results 126 93 Impairment of equity investments (68) (150) Income before taxation 2 871 1 460 Taxation (927) (569) Profit after taxation 1 944
Slide 11: Core headline earnings
Core headline earnings Sept ’07 Sept ’06 Rm Rm Headline earnings 1 588 1 276 +24% Adjusted for: Loss from discontinued operations 69 14 Deferred tax assets - (35) Amortisation of intangible assets 159 51 Fair value adjustments & currency translations (71) 16 Core headline earnings 1 745 1 322 +32% C
Slide 12: Free cash flow
Free cash flow Sept ’07 Sept ’06 Rm Rm Operating cash flow 2 337 1 981 +18% Capital lease payments (238) (256) Investment income 72 43 Capital expenditure (527) (376) Tax paid (637) (392) Free cash flow 1 007 1 000 12
Slide 13: Capital expenditure
Capital expenditure Sept ’07 Sept ’06 Rm Rm Pay TV / Mobile 163 55 Internet 38 13 Technology / Broadband 19 33 Print 307 275 Total 527 376 13
Slide 14: Free cash flow
Free cash flow Sept ’07 Sept ’06 Rm Rm Operating cash flow 2 337 1 981 +18% Capital lease payments (238) (256) Investment income 72 43 Capital expenditure (527) (376) Tax paid (637) (392) Free cash flow 1 007 1 000 Net cash balance R10,3bn 14
Slide 15: Electronic media
Electronic media 15
Slide 16: South African pay TV
South African pay TV ● Subscribers Sept ’07 Sept ‘06 Equated subscribers 1 473K 1 312k • Growth 81 500 equated Rm Rm • 159 000 Compact subscribers Revenue** 4 942 4 147 • 186 000 PVRs EBITDA* 1 838 1 356 ● DStv Select, Easyview EBITA* 1 755 1 288 ● Soccer – PSL ● Mobile TV trial 1,400,000 ● Pay TV l
Slide 17: Sub-Saharan Africa pay TV
Sub-Saharan Africa pay TV ● Subscribers Sept ’07 Sept ’06 • Growth 30 000 Equated subscribers 500k 422k Rm Rm ● Portuguese service Revenue 1 400 1 131 • Good growth – up to 132 000 EBITDA* 542 462 EBITA* 477 395 subscribers ● Focus on local programming 600,000 • Survivor Africa, West African Idols,
Slide 18: Greece pay TV
Greece pay TV Sept ’07 Sept ‘06 ● Greece subscribers Equated subscribers 344k 340k Rm Rm Revenue 910 817 • 83% digital EBITDA* 226 160 EBITA* 171 111 ● Enhanced sports line up, bolstered local production 300,000 250,000 200,000 ● Potential sale of Greece and 150,000 100,000 Cypriot businesses 50,000
Slide 19: Technology
Technology Content Protection Sept ’07 Sept ‘06 ● Growing the business Rm R m* Revenue 445 379 • Organic growth EBITDA** 62 56 EBITA** 51 48 • Development costs • Acquisitions Broadband Sept ‘07 Sept ‘06 Technology Rm R m* ● Irdeto shipped 26% more units Revenue 36 21 EBITDA** (79) (87) ● Signed agr
Slide 20: Internet Strategy
Internet Strategy •Deepen existing markets Russia Netherlands Poland Mail.ru Nimbuzz Gadu Gadu •Communication, SNS, Community •Disruptive technologies •Commerce China Tencent Brazil Abril internet Thailand Sanook! Africa India M-WEB, Afsat ibibo 24.com, MXit 20
Slide 21: Internet (1)
Internet (1) ● South Africa Sept ‘07 Sept ’06 • 330 000 subscribers Rm Rm • leading publisher Revenue 654 538 • profitable EBITDA* (20) 48 EBITA* (49) 24 ● Sub-Sahara Africa – acquired Afsat ● Poland – leading IM platform ● India – start up business ● Thailand – leading portal ● Development costs of
Slide 22: Internet (2)
Internet (2) ● Tencent – Leading IM platform Financial Apr-Sept Apr-Sept Operational Sept ‘07 Sept ’06 ’07 ’06 Revenue RMB 1,9bn RMB 1,4bn Total active users 289m 221m Operating profit RMB 833m RMB 637m Peak concurrent users (PCUs) 33m 22m Core headline earnings contribution R218m R127m Qzone users
Slide 23: Print media
Print media 23
Slide 24: Newspapers, magazines, printing (1)
Newspapers, magazines, printing (1) Sept ’07 Sept ‘06 ● Challenging economic conditions Rm Rm Revenue 2 569 2 283 EBITDA* 384 389 ● Advertising slowdown EBITA* 289 307 ● Business development costs: Various new titles 24 * Excludes other gains and losses
Slide 25: Newspapers, magazines, printing (2)
Newspapers, magazines, printing (2) ● Newspapers • Daily Sun biggest local daily – circulation + 500 000 • Tabloids Son, Sunday Sun and Soccer Laduuuuuma growing ahead of market • New launches – People’s Post, My Week, Sondag • Increased print capacity to meet demand ● Magazines • Launched new title
Slide 26: International print development
International print development ● Brazil – Abril • TVA disposal approved • Strong balance sheet ● China – BMC – challenging year – advertising regulations ● China – Titan – stake in sports magazine publisher in China ● Rest of Africa – encouraging magazine progress 26
Slide 27: Book publishing and education
Book publishing and education Book publishing Sept ‘07 Sept ‘06 ● Book publishers Rm Rm Revenue 429 339 • Good performance EBITDA* (9) (39) EBITA* (13) (42) • Disposed non-core businesses ● Private education • Divesting from Educor 27 * Excludes other gains and losses
Slide 28: Outlook
Outlook 28
Slide 29: Outlook
Outlook Snapshot Going forward ● Mixed trading conditions ● Increased competition ● Core businesses ● Higher development costs • Profitable ● Growth focussed • Strong cash flows 29
Slide 30: Q&A
Q&A 30
Slide 31: Consolidated income statement
Consolidated income statement Sept 2007 Sept 2006 Sept 2007 Sept 2006 Rm Rm US$ m US$ m Revenue 10,497 8,825 1,488 1,269 Operating profit 2,265 1,975 321 284 Net Finance Costs 548 (458) 78 (66) Share of equity accounted results 126 93 18 13 Impairment of equity accounted investments (68) (150) (10)
Slide 32: Subscriber numbers
Subscriber numbers 30-Sep-05 30-Sep-06 30-Sep-07 Africa SA - analogue 233,860 201,507 175,861 SA - digital 959,129 1,110,024 1,297,483 Total S.A. 1,192,989 1,311,531 1,473,344 Sub-Saharan Africa - analogue 1,519 189 - Sub-Saharan Africa - digital 354,237 421,510 500,463 Total Sub-Saharan Africa 355,