Financial Results Presentation For the year ended March 2010 - PowerPoint PPT Presentation

Financial Results Presentation For the year ended March 2010

Important information This presentation contains forward looking statements as defined in the United States 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 actual developments and results to differ materially from our expectations. These include key factors that could 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

Group Highlights p g g Key Messages Financial Results Operational performance Outlook Appendix

FY10 Group highlights • Revenue up 5% and EBITDA up 8% R 5% d EBITDA 8% • EBITDA margin expanded marginally Financial • Core headline earnings up 22% to ZAR5.3bn • Free cash flow increased to ZAR4.1bn • Internet growing; development spend impacted margins • Pay-TV subscribers +19% YoY Operational • Print affected by recession • Technology became profitable Technology became profitable • ZAR4bn invested in internet acquisitions Strategic • Entered Latin American internet market 4

FY10 Financial highlights Mar 09 Mar 10 Revenue (ZARbn) EBITDA (ZARbn) EBITDA Margin (%) Up 3% Up 5% Up 8% 24 3.2 2 2.8 28.0 6.5 23.2 22.6 26.7 6.0 Core Headline Earnings(ZARbn) Core Headline Earnings(ZARbn) Core HEPS(ZAR) Core HEPS(ZAR) DPS(ZAR) DPS(ZAR) Up 22% Up 21% Up 14% 1.9 2.4 5.3 2.35 1.26 2.07 4.4 11.79 5

Group Highlights p g g Key Messages Financial Results Operational performance Outlook Appendix

FY10 Key messages 1 Consistent growth trend over long-term 2 Further expansion of internet 3 3 Strong rand depressed figures Strong rand depressed figures 4 Growing dividend income 7

Good track record, consistent growth Revenue* (ZARm) EBITA* (ZARm) 40,000 9,000 8,000 35,000 7,000 30,000 6 000 6,000 25,000 5,000 20,000 4,000 15,000 3,000 10,000 2,000 5,000 1,000 - - 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 (1,000) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 * Based on economic interest, i.e. assuming all investments are proportionately consolidated Dividend per share (ZAc) Core Headline Earnings (ZARm) 250 6,000 6 000 5,000 200 4,000 150 3,000 100 2,000 1,000 50 - 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 (1,000) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 8

Group Highlights Group Highlights Key Messages Financial Results Operational performance Outlook Appendix

Summary consolidated income statement Mar 09 Mar 10 1 ZARm ZARm Revenue growth +5% Revenue Revenue 26,690 26 690 27 998 27,998 +11% in constant currency +11% in constant currency 1 1 2 EBITDA 6,026 6,496 2 EBITDA +8%, margin improvement due to cost control Operating profit 3,783 4,041 3 Net finance costs (303) (421) 3 Net finance costs +39% due to funding new acquisitions with debt Share of equity accounted results 1,473 2,058 4 Other Other (178) (178) 82 82 Higher tax rate includes the release of deferred tax assets of ZAR178m Taxation (1,436) (1,808) 4 Effective tax rate now 32% (30% before) Profit after taxation 3,339 3,952 Core headline earnings 4,373 5,319 Core headline EPS (ZAR) 11.79 14.26 10

Some effect of strong ZAR on figures Contribution by offshore operations affected by rand strength upon translation Revenue growth YoY EBITA growth YoY 30,000 5,900 , +18% +18% +11% 5,800 29,500 5,700 29,000 5,600 28,500 5,826 +5% 29,576 5,500 +10% 28,000 5,400 27,998 27,500 5,447 5,300 27,000 5,200 Reported Constant currency Reported Constant currency Average Closing rate Currency (1FC =ZAR) FY09 FY10 % change FY09 FY10 % change US dollar 8.79 7.71 -12 9.52 7.33 -23 Euro 12.26 10.91 -11 12.62 9.92 -27 Chinese Yuan/Renminbi 1.28 1.13 -12 1.39 1.07 -23 Brazilian Real 4.47 4.15 -7 4.13 4.11 -1 British pound 14.74 12.33 -16 13.61 11.13 -18 Polish Zloty 3.29 2.61 -21 2.72 2.57 -5 Nigerian Naira 0.071 0.052 -27 0.067 0.049 -27 11

Marginal growth in revenue* Revenue* (ZARm) Revenue (ZARm) Mar 09 Mar 10 % Change 20,000 Mar 09 Mar 10 Economic interest 34,505 37,251 8% 15,000 16,659 14 858 14,858 10,000 • Pay-TV revenue grew 12%, supported by 10,722 10,204 9,181 19% subscriber growth 7,411 5,000 • Internet held up; 24% growth YoY • Technology affected as new projects and 1,514 1,207 - major upgrades slowed due to the Pay-TV Internet Technology Print recession • Print business cyclical; advertising revenue Revenue* – historic growth (ZARm) in SA declined 1.4% 45,000 40,000 37,251 34,505 35,000 30,000 24,742 25,000 19,790 20,000 14,135 11,858 15,000 10,000 5,000 - 2005 2006 2007 2008 2009 2010 12 * Based on economic interest, i.e. assuming all investments are proportionately consolidated

Operational profit up 19% Operational Profit* (ZARm) Operational profit (ZARm) Mar 09 Mar 10 % Change 6,000 Economic interest 7,173 8,537 19% Mar 09 Mar 10 5,000 5,171 Operational margin p g 21% 23% 4,624 4 624 4,000 3,000 * Before amortisation, other gains/losses and including transponder leases 2,423 2,000 1,626 1,000 1,062 896 47 (139) • Margin expansion due to: Pay-TV Internet Technology Print – lower development spend (1,000) – cost-management Operational Profit* – historic growth (ZARm) • Internet profits contained by development spend 10,000 • Technology benefited from driving synergies and 8,537 7,173 need for less development spend 8,000 • Print margins affected by advertising slump and 5,362 6,000 restructuring charges 4,171 4,000 2,677 2,321 2,000 - 2005 2006 2007 2008 2009 2010 * Based on economic interest, i.e. assuming all investments are proportionately consolidated 13

Development spend flat; to increase D Development costs per business division l b i di i i 1 Mar 09 Mar 10 % Change ZAR125m for e-commerce ZARm ZARm ZAR76m for ibibo ZAR67m for 24.com Internet 483 511 6% 1 ZAR96m for mobile Pay-TV 196 424 116% 2 2 ZAR246m for mobile TV Technology 343 239 -30% ZAR178m for online/broadband 3 Print 189 66 -65% Total spend amounted to 4% of turnover 3 Total 1,211 1,240 2% 14

Income from associates up 50% Associate contribution to core headline earnings 1 Mar 09 Mar 10 Tencent again benefited from % Change ZARm ZARm strong growth in online gaming revenue Tencent 1,217 2,148 76% 1 2 Mail.ru 87 70 -20% 2 Mail.ru contribution mainly affected by currency translation Abril 414 318 -23% 3 3 Other Other (41) (41) (13) (13) 68% 68% Abril contribution affected by economic downturn and ZAR TOTAL 1,677 2,523 50% strength * Tencent, Mail.ru and Abril numbers reflect their financial periods Jan—Dec 09 15

Growing dividend income Dividends from associates becoming a good source of additional cash flow g g Dividends received from associates (ZARm) Dividends from associates as a % of Free Cash Flow Normal Special Associates 500 12% 400 191 300 200 200 296 100 88% 98 88 41 44 - 2006 2007 2008 2009 2010 16

Free cash flow up 70% Free cash flow from operations Mar 09 Mar 10 ZARm ZARm 1 Operating cash flow 5,814 7,264 Internet ZAR224m Pay-TV ZAR591m Capex (1,232) (1,403) 1 Technology ZAR199m Print ZAR389m Finance leases (450) (439) 2 2 Tax (1,798) (1,786) Dividends from Tencent , mail.ru and Abril and Abril Investment income 98 487 2 Free cash flow 2,432 4,123 17

Net consolidated debt – gearing only 5% Group net consolidated debt G t lid t d d bt Mar 10 1 ZARm Largely to fund acquisitions Net cash – South Africa 2,968 2 Net debt – offshore (US$634m) (4,657) 1 Excluding transponder leases of ZAR2bn considered an operating cost Closing net debt (1,689) 2 Debt facilities extended to US$1 72bn Debt facilities extended to US$1.72bn Group gearing 5% until March 2013 EBITDA cover 3.8x 18

Group Highlights Group Highlights Key Messages Financial Results Operational performance Outlook Appendix

Internet strategy: focused on communities Portals o ta s Mobile Mobile value-added services Instant Social messaging networking Community and e-mail Payment Online games platforms E-commerce 20

Emerging market focus 21