Naspers Limited Class N · JSE:NPN
Naspers Limited Class N — H1 2007 Earnings Presentation
31 slides from Naspers Limited Class N's earnings presentation, Nov 28, 2006
Slide 1: Results presentation
Results presentation For the six months ended 30 September 2006 28 November 2006 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 ● Continued favourable macroeconomic ● Revenue growth – 22% conditions ● Core headline earnings growth – 43% ● Pay TV subscriber growth 62 000 ● Free cash flow R1 billion ● Technology sales increased ● Launched new titles Investment / R&D focus M&A
Slide 4: Black Economic Empowerment (BEE)
Black Economic Empowerment (BEE) ● Two broad based BEE offerings • MultiChoice South Africa – Phuthuma Nathi • Media24 – Welkom Yizani ● Closed 3 November ● Substantially over-subscribed ● 100 000+ investors in each scheme ● Further 7.5% in MultiChoice South Africa 4
Slide 5: BRICSA
BRICSA ● Brazil • Magazines and books ● Russia • Investigating seriously ● India • Too expensive to buy in • Starting up internet business ● China • Substantial stakes, with partners • New ventures ● Sub-Sahara Africa • Pay TV profitable • Magazine start ups 5
Slide 6: Financial overview
Financial overview 6
Slide 7: Revenue analysis
Revenue analysis Sept ‘06 Sept ‘05 R bn R bn Total 9,1 7,4 +22% Electronic media 6,2 4,9 +26% - Pay television 5,3 4,2 - Internet 0,5 0,5 - Conditional access 0,4 0,2 - Broadband technologies 0 0 Print media 2,9 2,5 +12% - Newspapers, magazines and printing 2,3 1,9 - Book publishing and private educ
Slide 8: Operating margins
Operating margins Sept ‘06 Sept ‘05 Revenue R9,1bn R7,4bn +22% Operating profit before 1,9bn 1,5bn +33% amortisation, other gains/losses Operating margin 21.4% 19.6% ● Pay television – Net increased subscriber growth and scale effect ● Margin improvement – but increased R&D in 2nd half 8
Slide 9: Summary Income Statement
Summary Income Statement Sept ‘06 Sept ‘05 Rm Rm Revenue 9 072 7 429 Operating profit 1 969 1 424 Finance costs (466) (25) Share of equity accounted results 93 82 Impairment (150) - Profit on sale of investment - 16 Income before taxation 1 446 1 497 Taxation (571) (430) Profit after taxation 875 1
Slide 10: Core headline earnings
Core headline earnings Sept ‘06 Sept ‘05 Rm Rm Headline earnings 1 276 1 024 +25% Adjusted for: Deferred tax assets (35) (10) Amortisation intangible assets 51 34 Foreign currency translation differences and fair 16 (91) value adjustments Profit discontinued operations - (43) Core headline earnings
Slide 11: Free cash flow
Free cash flow Sept ‘06 Sept ‘05 Rm Rm EBITDA 2 262 1 735 Non-cash items and working capital (281) (130) Investment income 43 41 Capital expenditure (376) (408) Capital lease payments (256) (207) Tax paid (392) (309) Free cash flow 1 000 722 +39% 11
Slide 12: Net cash flow
Net cash flow Sept ‘06 Rm Free cash flow 1 000 Investments (3 707) Dividends (378) Interest 44 Net cash flow (3 041) Net cash balance 2 665 12
Slide 13: Electronic media
Electronic media 13
Slide 14: South African pay TV
South African pay TV Sep ‘06 Sep ‘05 Subscribers 1 312k 1 193k ● Subscribers Rm Rm • 85% digital Revenue 4 147 3 431 EBITDA 1 356 1 012 • Growth 62 000 EBITA 1 288 957 • 67 000 Compact subscribers • 65 500 PVRs 1,400,000 1,200,000 ● Mobile TV 1,000,000 800,000 600,000 ● Satellite broadcast licence 4
Slide 15: M-Net / SuperSport transaction
M-Net / SuperSport transaction ● Current ownership structure • Naspers 60.12% • Johncom 38.56% ● Rationale • Consolidate and simplify structure ● Consideration • 20.9 million Naspers shares + R250m cash ● Conditions precedent 15
Slide 16: Sub-Saharan Africa pay TV
Sub-Saharan Africa pay TV Sep ‘06 Sep ‘05 ● Subscribers Subscribers 422 356 Rm Rm • 100% digital Revenue 1 131 817 EBITDA 462 302 • Growth 35 000 EBITA 395 240 ● Portuguese service 500,000 • Good growth 400,000 300,000 • Up to 100 000 subscribers 200,000 100,000 ● Continued regulatory pressures 0 Se
Slide 17: Greece and Cyprus pay TV
Greece and Cyprus pay TV Sep ‘06 Sep ‘05 ● Acquired additional 12% stake Subscribers 340 364 Rm Rm Revenue 817 715 ● Greece subscribers EBITDA 160 204 EBITA 111 165 • 79% digital • Growth 10 000 400,000 350,000 300,000 250,000 ● Cyprus 200,000 150,000 100,000 50,000 0 Sep '01 Sep '02 Sep '03 Sep '04
Slide 18: Conditional Access – Irdeto
Conditional Access – Irdeto Sep Sep ‘05 ‘06 ● Irdeto shipped some 4.5 million units Rm Rm Revenue 359 192 ● Acquired Philips CryptoTec EBITDA 83 20 EBITA 76 14 • 300 customers • 60 countries ● Developing mobile TV and IPTV 18
Slide 19: Broadband technologies – Entriq
Broadband technologies – Entriq Sep ‘06 Sep ‘05 Rm Rm ● Broadband growing globally Revenue 41 23 EBITDA (114) (43) ● Gained traction EBITA (123) (49) • Revenue growth of 78% • Licenses issued up to 100m ● Continued R&D investment 19
Slide 20: Internet
Internet Sep ‘06 Sep ‘05 ● South Africa Rm Rm Revenue 538 471 • 338 000 subscribers EBITDA 48 (21) EBITA 24 (56) • Broadband rollout improving • Profitable ● Thailand - internet portal Sanook • Increased its leadership position ● China – Tixa ● India – start up business 20
Slide 21: Internet - Tencent
Internet - Tencent 3Q ‘06 3Q ’05 RMB m RMB m ● Leading Chinese instant-messaging Revenue 737 363 Operating profit 327 117 platform ● Peak concurrent users 22.1 m ● Launched new services ● Diversified business models and revenue streams 21
Slide 22: Print media
Print media 22
Slide 23: Newspapers, magazines, printing (1)
Newspapers, magazines, printing (1) Sep ’06 Sep ‘05 ● Robust economic conditions Rm Rm Revenue 2 255 1 910 ● Strong organic growth EBITDA 392 344 EBITA 314 284 ● Continued advertising growth ● New printing plant – Paarl Web Gauteng ● Re-investment 23
Slide 24: Newspapers, magazines, printing (2)
Newspapers, magazines, printing (2) ● Newspapers • Daily Sun biggest local daily – circulation some 493 000 • Son, Sunday Sun and Soccer Laduuma continue to grow • New launches – People’s Post, My Week, Cape Son • Additional printing presses ● Magazines • Launched new titles – Maxpower, True Love Ba
Slide 25: Book publishing and education
Book publishing and education Sep ’06 Sep ‘05 Rm Rm ● Book publishers Revenue 614 584 EBITDA (37) (10) • Increased marketing spend EBITA (53) (22) • School book market cyclical ● Private education • Progress with repositioning 25
Slide 26: International print development
International print development ● Abril • 30% stake in #1 Brazilian magazine media company • Flagship newsweekly Veja 4th highest selling weekly globally • Leading educational publisher ● Titan • Stake in sports magazine publisher in China • Completed 1st stage closing of 20% ● Rest of Africa • Good
Slide 27: Outlook
Outlook 27
Slide 28: Outlook
Outlook Snapshot Focus going forward ● Favourable economic ● Explore further investments, conditions, but may weaken especially in larger emerging ● Core businesses economies • Profitable • Strong cash flows ● Increased R&D • Broadband technologies • Mobile TV 28
Slide 29: Q&A
Q&A 29
Slide 30: Consolidated income statement
Consolidated income statement Six Six Year Six Six Year months months ended months months ended ended ended ended ended 30 Sept 30 Sept 31 Mar 30 Sept 30 Sept 31 Mar ’06 ’05 ’06 ’06 ’05 ’06 Rm Rm Rm US$ m US$ m US$ m Revenue 9,072 7,429 15,706 1,175 1,170 2,554 - - - Operating profit 1,969 1,424 3,0
Slide 31: Subscriber numbers
Subscriber numbers 30-Sep-04 30-Sep-05 30-Sep-06 31-Mar-06 Africa SA - analogue 277,238 233,860 201,507 217,440 SA - digital 829,283 959,129 1,110,024 1,033,093 Total S.A. 1,106,521 1,192,989 1,311,531 1,250,533 Sub-Saharan Africa - analogue 7,338 1,519 189 819 Sub-Saharan Africa - digital 304,861 3