Financial results presentation For the six months ended 30 September 2012
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 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 Overview Financial Results Internet Pay-TV Outlook Appendix 3
Naspers key financials for 1H FY13 Sep 11 Revenue (ZARbn) Trading profit (ZARbn) Sep 12 22% 6% 3.4 22.6 3.2 18.5 Core HEPS (ZAR) Free Cash Flow (ZAR) 15% 22% 10.62 1.7 9.21 1.4 4
Sustained revenue momentum Revenue (ZARm)* 35,000 30,000 25,000 20,000 34,172 15,000 25,802 21,425 10,000 17,521 15,855 11,272 5,000 - Sep 07 Sep 08 Sep 09 Sep 10 Sep 11 Sep 12 * Based on economic interest, i.e. assuming all equity accounted investments are proportionately consolidated 5
Increased focus on organic growth Development spend vs. Other operating costs (ZARm) 36,000 2,823 1,535 27,000 1,240 1,211 1,591 18,000 1,126 31,180 25,712 21,311 20,363 18,513 9,000 15,402 - Mar 09 Mar 10 Mar 11 Mar 12 Sep 11 Sep 12 Other operating costs Development costs 6
More investment activity Total acquisition spend (US$m) Subsequent acquisitions 800 600 377 400 754 Other 517 200 260 214 - Mar 09 Mar 10 Mar 11 Mar 12 Sep 12 7
Solid earnings growth Core Headline Earnings (ZARm)* 4,500 4,000 3,500 3,000 2,500 4,086 2,000 3,458 3,215 1,500 2,414 1,000 1,763 1,706 500 - Sep 07 Sep 08 Sep 09 Sep 10 Sep 11 Sep 12 * Based on economic interest, i.e. assuming all equity accounted investments are proportionately consolidated 8
Group Overview Financial Results Internet Pay-TV Outlook Appendix 9
Revenue: internet remains major growth driver Revenue* (ZARm) 1H FY13 Revenue by Business* 32% 19% 40,000 70% 34,172 262 5,638 2,285 30,000 5,823 14,108 20,000 25,802 14,426 10,000 – Sep 11 Internet Pay-TV Print Sep 12 Internet (41%) Pay TV (42%) Print (17%) * Based on economic interest, i.e. assuming equity accounted investments are proportionately consolidated Internet Pay-TV Tencent & Mail.ru’s revenue +82% YoY 16% increase in subscribers YoY E-Commerce revenue increased 61% YoY 7% growth in advertising revenue over 12 months 10
Growing organically: development spend up 41% Development spend (ZARm) Development spend split 1H FY13 67 3,000 2,500 41% 482 2,000 1,500 2,823 1,042 1,000 1,591 1,535 1,240 1,211 1,126 500 0 Mar 09 Mar 10 Mar 11 Mar 12 Sept 11 Sept 12 Internet (66%) Pay-TV (30%) Print (4%) Internet Pay-TV … to accelerate 2H additional products and services ZAR345m for DTT, mobileTV and online more engineers and marketing ZAR137m for other technologies New DTT licenses expected 2H 11
Trading profit: trimmed by development costs Trading profit* (ZARm) 1H FY13 Trading profit by Business* 28% 247 18% 7,356 47% 8,000 - 604 994 3,089 6,000 4,000 4,020 5,757 2,000 - Sep 11 Internet Pay-TV Print Sep 12 Internet (42%) Pay TV (55%) Print (3%) * Based on economic interest, i.e. assuming equity accounted investments are proportionately consolidated Internet Pay-TV Margins lower due to change in business mix and cost of Scale resulted in stable margins, despite costs of DTT roll-out and scaling e-commerce operations additional investment in content 12
Summarised consolidated income statement Sep 11 Sep 12 Select information ZARm ZARm +22% Revenue growth Revenue 18,482 22,597 Increased 4% YoY in constant currency EBITDA 3,883 4,208 Finance costs up EBITDA margin 21% 19% Higher debt levels to fund acquisitions Normalised preference dividend income Trading profit 3,167 3,368 Net finance costs (148) (488) Income from associates Share of equity accounted results 1,618 4,064 Includes R1.5bn once-off book profit on Mail.ru’s partial sale of Facebook Taxation (1,008) (1,394) Net profit 2,265 4,658 Increased 6% YoY in constant currency +18% Core headline earnings Core headline earnings 3,458 4,086 Core headline EPS (ZAR) 9.21 10.62 13
Free cash flow: boosted by investment income FCF from operations Capex +40% Sep 11 Sep 12 ZARm ZARm Pay-TV (incl. DTT) ZAR639m Internet ZAR171m Operating cash flow 2,921 3,259 Print ZAR196m Capex (719) (1,006) Finance leases (231) (263) Investment income Tax (886) (1,274) includes R519m dividend from Tencent and R388m operational dividend from Mail.ru Investment income 285 954 Free cash flow 1,370 1,670 Free cash flow (ZARm) 5,000 4,000 22% 3,000 3,991 3,619 4,123 2,000 2,432 1,670 1,000 1,370 - Mar 09 Mar 10 Mar 11 Mar 12 Sep 11 Sep 12 14
Balance sheet: remains strong Increase in net debt a consequence of debt-funded Sep 12 acquisitions Group net consolidated debt ZARm Net debt – offshore (US$1.3bn) (11,075) Net debt Minus: Net cash – South Africa 4,341 excludes transponder leases of ZAR5.7bn, considered to be an operating cost Closing net debt (6,733) Interest cover 13x Gearing 14% 15
Group Overview Financial Results Internet Pay-TV Outlook Appendix 16
e-Commerce: strategy and positioning Mobile Portals value-added services Vertical e-tail General e-tail Facilitation B2C (fashion, shoes, etc.) (marketplace etc.) Social networking Payment Marketplace Classifieds platforms Vertical e-tail Other (facilitation) (free, paid) e-Commerce Lead-generation Classifieds Lead-generation Payments (price-comparison etc.) (free, paid) (price-comparison etc.) Other Payment platforms 17
e-Commerce: different business models How profitable is selling a $500 Samsung smartphone?… Marketplace General e-tail US$ US$ Revenue (7% take rate) 35 Revenue (includes inventory) 500 Trading margin 36% Trading margin 4% Trading profit Trading profit 13 20 …it depends on your business model 18
e-Commerce: group financials Continued focus on scaling operations Revenue by type ZARm Sep 11 Sep 12 % Change Revenue 2,478 3,991 61% Trading profit (211) (767) > -100% Strategy Expansion across the e-commerce value chain Focused on scaling e-tail, Payments and Classifieds Revenue Marketplace (33%) General e-tail (29%) Organic growth accounts for 27% of total revenue growth, Lead generation (11%) Vertical e-tail (11%) rest acquisitive Payments (6%) Classifieds (6%) General e-tail the fastest growing segment Other (4%) 19
e-Commerce: revenue growth Revenue (ZARm) 6,000 5,000 61% 4,000 3,000 5,736 3,991 2,000 3,684 2,713 2,478 1,981 1,000 - Mar 09 Mar 10 Mar 11 Mar 12 Sep 11 Sep 12 20
e-Commerce: development spend Development spend (ZARm) 2,000 1,500 87% 1,000 1,725 1,031 500 575 550 272 268 - Mar 09 Mar 10 Mar 11 Mar 12 Sep 11 Sep 12 21
e-Commerce: Expansion into B2C affecting margins Revenue by type Marketplace (39%) PLNm* Sep 11 Sep 12 % Change General e-tail (37%) Revenue 538 1,046 95% Vertical e-tail (9%) Trading profit 108 2 n/a Classifieds (6%) Lead generation (3%) * Data reflects 100% of results; 1H FY13 ZAR/Zloty 2.48 (2.45) Payment Platforms (3%) Other (3%) Operations Further investment in classifieds and e-tail Operations now in 20 countries and 7 verticals Revenue by geography Acquisitions: agito, Netretail, eMag, lazienkaplus Poland (50%) Financials Czech (16%) Represents 65% of group e-commerce revenue (53% in 1H FY12) 12% of total revenue growth organic, rest acquisitive Turkey (14%) Core marketplace platform in Poland profitable Other (20%) Development spend more than doubled to PLN161m 22
Internet: Another good performance Q3 2012 statistics • 784m monthly active IM user accounts (+10% YoY) RMBm* Jun 11 Jun 12 % Change • 167m peak concurrent IM user accounts (+15% YoY) Revenue 13,078 20,175 54% • 9.4m PCU’s for QQ Game Platform (+18% YoY) • 74m fee-based IVAS registered subscriptions (-5% YoY) Operating profit 6,170 7,629 24% • WeChat (Weixin) expanding internationally, registered user accounts exceed 200m in Sept. Operating margin 47% 38% * Data for 1H FY13 reflects 100% of results Jan-Jun 2012 available on www.Tencent.com; 1H FY13 ZAR/Rmnb1.30 (1.083) Operations Shift in revenue mix impacted margins Progress in advertising and open platform initiatives Revenue mix 1H FY13* Continues to build stronger user engagement Investment in innovations to enhance user experience IVAS gaming (54%) IVAS other (21%) Financials MVAS (9%) e-Commerce (8%) Shift in revenue mix impacted margins Successfully issued US$600m bond in Sept 2012 Advertising and other (8%) 23
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