Analyst Booklet - detailed financials - For the year ended 31 March 2018 - Naspers
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Analyst Booklet – detailed financials For the year ended 31 March 2018
Important information
This report 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”, “endeavor” and similar expressions are
intended to identify such forward-looking statements, but are not the exclusive means of identifying such statements.
By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances and
should be considered in light of various important factors. 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. The key factors that could cause our actual results performance, or achievements to differ
materially from those in the forward-looking statements include, among others, changes to IFRS and the interpretations,
applications and practices subject thereto as they apply to past, present and future periods; ongoing and future acquisitions,
changes to domestic and international business and market conditions such as exchange rate and interest rate movements; changes
in the domestic and international regulatory and legislative environments; changes to domestic and international operational,
social, economic and political conditions; the occurrence of labour disruptions and industrial action and the effects of both current
and future litigation.
We are not under any obligation to (and expressly disclaim any such obligation to) revise or update any forward-looking statements
contained in this report, whether as a result of new information, future events or otherwise. We cannot give any assurance that
forward-looking statements will prove to be correct and investors are cautioned not to place undue reliance on any forward-looking
statements contained herein.
2
1.Strategic review
2. Operational review
Agenda
3. Financial review
4. Outlook
Strategic review
In pursuit of growth - how do we create value?
• We pursue growth and
create value by building
leading companies that
empower people and
Active management of assets enrich communities.
• We partner with
founders/entrepreneurs
to build platform
businesses which offer
services that address
fundamental needs.
• We focus on high-growth
Rigorous capital allocation markets.
• As these platforms scale,
they provide strong and
defensible leadership
positions, which translate
into healthy financials.
• Underpinned by our
Strong growth and financial returns active management of
assets and rigorous
capital allocation, we
ensure we optimise our
portfolio to create
long-term value for
shareholders.
5Managing assets and allocating capital for growth and financial returns
• We have a systematic
approach to how we allocate
our capital:
‐ We typically invest in new
businesses early on,
focusing on opportunities
with the potential to scale
globally.
‐ We often ‘double-down’ on
existing investments,
helping them build scale
and market leadership.
‐ Once we are comfortable
about a winning
proposition, we go ‘all-in’,
driving these businesses to
profitability and cash
generation.
‐ We also have businesses
that are mature, profitable
and cash generative.
‐ In addition we have
invested in a number of
companies that are public.
6We have delivered well on our objectives
FY18 Objectives FY18 Highlights
Revenue up 38% (39%) YoY to US$20.1bn
Deliver strong financials Trading profit up 47% (52%) to US$3.4bn
Core headline earnings up 72% to US$5.81 per N ordinary share
Classifieds (excl. letgo) turned profitable (US$63m) and FCF positive
Scale classifieds
Scale classifieds (+letgo)
(Letgo)
letgo (US) achieved leadership on key metrics vs Offerup
Total payment value exceeded US$25.5bn, up 53% YoY
Drive payments growth Reduced trading loss by 42% on existing footprint (in local currency)
Expanded credit business: invested in Kreditech and others
Expand food delivery iFood revenue up 121% YoY to US$117m
Invested in Delivery Hero (US$1.3bn for 23%) and Swiggy (US$201m for 23%)
Increased subscriber base by 13% to 13.5m households
Grow VE subscribers and cut costs Revenue increased 8% (7%) and trading profit 29% (24%)
Reduced costs by over US$70m, stabilised SSA losses
Note: Numbers in brackets represent year-on-year growth in local currency, excluding M&A.
7Operational review
Classifieds: clear leader in the global landscape
Global footprint
• Global leader in online
41
classifieds, with 17
brands across 41
Countries3 countries.
• 5 000 employees in
35 offices across
footprint.
• Leading in 36 countries.
• Over 330m monthly
users worldwide, 62m
net new listings
Mobile leadership Scale2 monthly.
Top 3 app 4.4 90m 62m • 90m app users, up 29%
YoY.
36 COUNTRIES1 APP RATING Monthly Monthly
App Users Net New Listings
1 Google play store; shopping/lifestyle categories.
2 Numbers reflect proportionate share of users of equity-accounted investments.
3 Countries with lower than 1 000 daily unique listers (7 in total) excluded from ‘active country’ list.
9Classifieds: engagement metrics reflect continued growth
Average monthly unique listers (MUL),(m)1 Average monthly paying listers (m)1 • Our teams have spent over 10
years building a ‘top of mind’
29%
classifieds business in the
markets we operate.
• Despite our considerable size,
user engagement continues to
reach new levels.
• Monthly unique listers averaged
30% ~22m, an increase of 29% YoY.
• We have been able to convert
this into 2.5m monthly paying
21.8 listers, up 30% YoY.
16.8
2.5
1.9
FY17 FY18 FY17 FY18
1 Data reflects full year averages at 100% of controlled entities and proportionate share of equity-accounted investments.
10Classifieds: growing far ahead of industry peers on limited monetisation
OLX Group: average revenue/internet user (ARPIU) 1 : Industry peers 2 : • We continue to expand our
monetisation countries (US$) revenue growth rates (reported currency) monetisation markets.
33% • ARPIU increased 33% YoY to
64% US$1.44. Compared to peers
(many generating ARPIU
between US$13 – US$30), this
suggests significant upside
potential.
• EBITDA margin for
monetisaton countries
expanded from 45% to 49%.
1.44 34%
• Revenue growth in FY18 (last
1.08 fiscal) was ~3x our industry
peers.
0.72
• Our unique portfolio mix
14% allows us to sustain high
12%
growth.
FY16 FY17 FY18
Prior fiscal Most recent fiscal
EBITDA margin 45% 45% 49%
Industry average OLX Group
1 OLX Group data excludes letgo. Calculated as total revenue for OLX monetisation countries (FY18: n=14), divided by the total number of internet users
in those countries.
2 Industry peers include TradeMe, Rightmove, Schibsted Classifieds, Axel Springer, Scout24.
Sources: Company filings, investor reports, EIU reports and Factset.
11Classifieds: acceleration by our European leaders
Russia Poland Brazil1 • Avito and Poland continue to
be portfolio leaders, increasing
top and bottom line growth
MULs +23% MULs +17% substantially YoY. Both now
MULs +10%
generate trading margins
above 50%.
# of # # of
Paying +15% Paying +20% Paying +45%
listers listers listers
• Brazil has emerged as one of
our strongest growth markets.
App App App Increased investment to
MAUs +33% MAUs
+48% +20% enhance service and product
MAUs
offerings, impacted
profitability to March (the
business reached break-even
Financials (RUBm) FY17 Financials (PLNm)2 FY17 Financials (BRLm) FY17 during the year).
FY18 FY18 FY18
28% 60% 69%
• All 3 regions have been posting
16 350 80% strong growth across key
103
29% metrics – and delivered these
12 719
61 89% results off fairly high bases.
8 802
6 827 (26) ( 3)
Revenue Trading profit Revenue Trading profit Revenue Trading loss
1 OLX Brazil is a 50/50 joint venture (JV) with Schibsted Media Group.
2 Financial information for Avito and OLX Brazil are reported publicly by other listed shareholders, whilst information for OLX Poland is not publicly disclosed.
12Classifieds: letgo growth exceeding expectations on limited marketing
US Turkey
Mobile monthly active users (MAU), (m) Mobile monthly active users (MAU), (m)
• Maintained lead against
Offerup in the US, while
24% closing the gap against
20%
Sahibinden in Turkey.
• Pulled back on marketing
spend and focused on
product improvement and
user retention.
• US: annualised average
mobile MULs +42% YoY.
Started testing
monetisation features with
excellent results so far.
• Turkey: focus on product
Mar-16
Jul-16
Sep-16
Nov-16
Mar-17
Jul-17
Sep-17
Nov-17
Mar-18
Jan-16
May-16
Jan-17
May-17
Jan-18
Sep-16
Mar-16
Jul-16
Nov-16
Mar-17
Jul-17
Sep-17
Nov-17
Mar-18
Jan-16
May-16
Jan-17
May-17
Jan-18
paid off, annualised
average mobile MULs
increased 53% YoY.
OfferUp letgo Sahibinden letgo
Note: letgo, OfferUp & Sahibinden data from leading third-party data provider.
13Classifieds: extending our business model
• Started off focusing on building
classic horizontal platforms, making
Specialised convenient it easy for anyone to buy and sell
almost anything and thus creating a
transactions “win-win” environment.
• Expanded into vertical offerings
Vertical offerings through brands such as Otomoto
and Strada in the vehicle space, as
well as Otodom and Storia in the
real estate space. Currently have
~15 vertical brands across 31
countries.
Classic horizontal platform
• Extending business model by
focusing on ‘convenient
transactions’ models that aim to
further enhance the customer
experience - acquired/invested in
WeCashAnyCar and Expat Wheels
of Dubai and the global consumer-
to-business (C2B) platform Frontier
Car Group.
• Also successfully tested delivery
2008 2012 2018 services in a number of markets
and plan to roll it out more widely.
14Payments: scaling the core business, building organisational capabilities
Global footprint – operations in 17 markets Average daily transactions (m) • 1 API, 250 payment methods.
• PayU transforming from a payments
28%
business to a broader fintech
services business.
• As part of this process, invested:
2.04 − US$99m for a 37.6% stake in
1.60 Kreditech, a leading technology
group for digital consumer
credit, to bring innovative credit
services to underserved markets;
Mar17 Mar18
− US$100m for a 22.6% stake in
Remitly, a technology-driven
Total payment value (US$bn) remittance business; and
− also added Paysense and Zest
Core Credit Remittances Other 53% Money to extend our fintech
payments services
service offering.
• Total payments value (TPV) up 53%
YoY to US$25.5bn, with over 650m
25.5 transactions processed during the
16.7 year.
• PayU India, which accounts for 47%
of PayU group TPV, reported an 84%
FY17 FY18 increase YoY in total payment value.
Note: Digital Currency Group forms part of the Naspers Ventures portfolio.
15Food delivery: leadership positions in many large geographies
Global footprint - leadership position in 40 markets • Increased focus on online food
GMV (US$m)1 65%
delivery services with 2 notable
minority investments in the year:
‐ Delivery Hero: invested US$1.3bn
for 23% effective stake (22% fully
diluted). The business continues
to build its leadership across the
42+ countries where they operate
(currently lead in 36); and
‐ Swiggy: Invested US$121m during
FY17 FY18 FY18 and committed to another
US$80m in June 2018. Following
Orders (m)1 this, the group will hold a 24%
65% effective interest (23% fully
diluted).
• Cumulative annualised GMV for the
food-delivery segment increased
65% YoY.
• Cumulative annualised order
volumes increased 65%.
− Delivery Hero +46% YoY
FY17 FY18 − iFood +116% YoY
1 GMVis calculated in US$ using average exchange rates for respective years. Delivery Hero’s financial year end is December; however data reflects
the April 2017 – March 2018 period to align with iFood and Swiggy. GMV and number of orders exclude Mr D, which is a subsidiary of Takealot.
16Food delivery: iFood grew strongly across all key metrics
• iFood, a subsidiary of Movile,
is a leading online food-
delivery platform in Latin
GMV (US$m)1 Orders (m)1 America.
111% 116% • Business continued to grow
strongly across all key metrics
– order volume, average take
rates and customer retention.
• Recorded FY18 order volume
growth of 116% YoY.
• Preferred destination for food
delivery in Brazil, where the
number of restaurants, order
numbers and GMV more than
doubled YoY.
FY17 FY18 FY17 FY18
1 Datareflects 100% of the underlying operations, irrespective of our effective interest. GMV is calculated in US$ using average exchange rates
for respective years.
17B2C etail: solid growth and improving economics
2
• eMAG achieved strong GMV growth
in its core markets Romania,
Hungary, and Bulgaria.
YoY organic GMV growth 1
• Takealot extended leadership in SA
FY17 34% FY17 34% and expanded reach outside core
categories. Naspers invested an
additional US$74m in April 2017 to
acquire a controlling stake (resulting
FY18 34% FY18 57% in the consolidation of the entity),
followed by another US$128m
investment in Dec 2017 to take the
effective stake to 96% (91.2% fully
v
Note: Nominal growth: 42% (FY18) and 30% (FY17) Note: Nominal growth: 70% (FY18) and 33% (FY17)
diluted).
• Disposed of Souq in Middle East and
Konga in Nigeria to improve long-
FY17 FY18 FY17 FY18
term returns. Also finalised closure
of Markafoni in Turkey.
EBITDA as % of GMV
0.3% • Announced disposal of 12.4%
(11.18% fully diluted) stake in
-16.9% Flipkart, to US-based retailer
-0.7% Walmart in May 2018. Subject to
regulatory approval, the US$2.2bn
-24.8%
in proceeds represents an IRR of
~32%.
1 GMV in local currency, reflecting 100% of underlying businesses for the review period. Nominal growth reflects growth in US$.
2 eMAG Romania.
18VE: encouraging subscriber growth, changing mix
• Macroeconomic environment
Video entertainment subscriber homes (‘000) Change in subscriber mix (‘000) remained a challenge and business
continued to face competition from
13% international players.
Total 8 059 10 225 10 411 11 942 13 476 • Segment nonetheless recorded good
1 921
growth, adding just over 1m DTH and
520k DTT subscribers, to bring the
1 962 total base to 13.5m households across
3 522
the African continent.
+17% 3 520
3 001 • DTH growth in SSA continued to
2 256 2 404 3 181 benefit from our value strategy, in SA
3 033 growth was driven by the Access tier.
817 2 583 +17% • DTT growth benefited from the launch
2 563 2 275 of the popular GOtv Max package and
2 234 the partial analogue switch-off in
Zambia.
8 035
+9% • Sizeable market remains at lower-end.
6 799
6 358 6 921
5 732 This segment now accounts for 60% of
5 008 5 406
total subscribers.
• The focus of our VE business remains
on driving subscriber growth,
investing in local content, optimising
FY14 FY15 FY16 FY17 FY18 FY17 FY18
cost structures and reinvesting for the
online future.
SA DTH SSA DTH SSA DTT Premium Compact Lower-end
19VE SA: solid all-round performance in tough macro environment
SA net additions (‘000) • Added >500k subscribers,
approaching a total base of 7m
households.
309 6 month average 316 311
278 286 • Mass market growth trend continues,
248 Premium tier growth is declining and
232
Compact tier growth is starting to
166 156 169 stabilise.
• Change in customer mix resulted in
ARPU declining marginally from R353
to R344 year on year.
1H14 2H14 1H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18
• PVR’s have increased 9% YoY and the
1.4m customers at present represent
an 81% penetration on Premium and
PVR’s (‘000) ARPU (ZAR) 12% penetration on Compact. Strong
retention and ARPU benefit.
9% 3%
• Combined Showmax Africa and DStv
1 418 353 Digital Media into Connected video
1 295 344
business to drive increased focus on
online/OTT customer offering.
• Successfully renewed key
entertainment and sport rights, e.g.
EPL, PSL and UEFA Champions League
and invested ZAR5.8bn in local
FY17 FY18 FY17 FY18 content (general and sport).
20VE SSA: turnaround continues
SSA DTH net additions (‘000) • Ongoing turnaround in SSA,
despite macro challenges.
418
• Active customer base for the
215 208 6 month average
SSA business (both DTH and
108 121 33 126 182 32 DTT) as at FY18 was 6.6m
households, representing 49%
of the group’s total subscriber
(321) base.
• Net DTH additions were
1H14 2H14 1H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18 particularly strong during 2H18,
following the implementation of
the next phase of our ‘value
strategy’ (i.e. pricing,
DTH PVR’s (‘000) DTH ARPU (US$)
promotions etc.).
74%
-12% • ARPU reduction is due to Naira
454 devaluation and value strategy
price downs.
26
23 • Removed substantial costs from
261
the business by renegotiating
international content
agreements, dropping non-
performing content and
FY17 FY18 FY17 FY18 reducing local football rights.
21Financial review
FY18 financial highlights
1 Accelerated growth in revenue and trading profit
2 Ecommerce losses narrowing, margins improving
3 Classifieds turned profitable and cash generative (excluding letgo)
4 Steady results from video entertainment, sub-Saharan Africa losses stabilised
5 Tencent performance contributed to healthy earnings growth
6 Strong balance sheet + healthy returns underpin our conviction to seek out further opportunities
23Synopsis of financials
Revenue (US$bn)1 Development spend (US$bn)1 Trading profit (US$bn)1,2
47% (52%)
38% (39%)
-12% (-12%)
3.4
20.1 1.1 1.0
14.6 2.3
FY17 FY18 FY17 FY18 FY17 FY18
Core headline earnings (US$bn)2 Core HEPS (USc)2 DPS (ZAR)
72% (67%) 72% 12%
581
2.5
337 5.80 6.50
1.5
FY17 FY18 FY17 FY18 FY17 FY18
1 Results reported on an economic-interest basis, i.e. equity-accounted investments are proportionately consolidated. Numbers in brackets represent year-on-year growth in local currency, excluding M&A.
2 FY17 restated for the group’s change in the calculation of trading profit and core headline earnings regarding Tencent’s digital content amortisation.
24Ecommerce and Tencent underpin revenue growth
• Internet revenues account for 79%
YoY revenue growth rate (%)1 FY17 Revenue by segment (US$m)1 of group revenues (73% in FY17).
56% FY18 • Classifieds, B2C and food delivery
47% Social & internet platforms (61%) contributed meaningful growth,
39% 36% resulting in a 9% acceleration of the
29% Ecommerce (18%)
27% ecommerce growth rate YoY (i.e.
7% 7%
1% Video entertainment (18%) 36% vs 27% reported in the prior
year).
(1%) Media and other (3%)
Naspers Ecommerce Social & Video Media • Social & internet platforms
group internet entertainment increased revenue by 56% YoY, a 9%
plaforms
acceleration. Tencent was the
major driver, with healthy growth
Incremental revenue by segment, YoY (US$m)1 across all revenue streams resulting
in 56% revenue growth in local
currency.
YoY change (%) 36% 56% 7% 1% -3% 5% 38% (39%)
• VE sustained revenue growth of 7%
YoY, driven by a 13% growth in the
4 250 232 5 (477) 666 subscriber base. A stronger ZAR
859
impacted positively, but further
20 097 currency weakness in Nigeria and
14 562
Angola had the reverse effect.
FY17 Ecommerce Social & internet Video Media M&A and other Forex FY18
• The disposal of Allegro in FY17 had a
platforms entertainment negative impact of US$327m on
revenue growth.
1 Results
reported on an economic-interest basis, i.e. equity- accounted investments are proportionately consolidated. Numbers in brackets
represent year-on-year growth in local currency, excluding M&A.
25Ecommerce growth accelerating
Constant currency revenue growth by type (%)1 • Ecommerce growth amounted to 36%,
a 9% acceleration on the prior year.
• Classifieds continue to grow strongly,
187% but off a much higher base. Revenues
are trending toward the US$1bn mark.
121% • Travel growth rates in the prior year
benefited from both ibibo and MMT
successfully scaling the hotel booking
business from a very low base.
64% 62% • PayU accelerated its growth to 37%,
with payment volumes growing a
healthy 53%.
• Healthy growth in etail was
36% 35% 37% 36% underpinned by meaningful GMV
32%
growth across all our businesses.
27%
21% • iFood, which benefited from a 116%
21%
growth in orders, was the main driver
of the 121% growth in food delivery
Ecommerce Classifieds Travel Payments Etail Food delivery revenues. (These numbers were not
affected by Delivery Hero and Swiggy,
FY17 FY18 as these investments were made in
1 Results reported on an economic-interest basis, i.e. equity-accounted investments are proportionately consolidated, reflecting year-on-year growth FY18 and thus excluded here as M&A).
in local currency, excluding M&A. Note: Allegro was sold in FY17, resulting in the marketplace segment falling away. FY17 revenue growth in trave
l was boosted by the launch of the India hotel segment.
26Diversified business mix – ongoing shift
FY18 Revenue by geography1 FY18 Revenue by type1 • Diversity of revenue streams reduce
the risk of exposure to any one
territory/currency or business model.
• 84% (FY17 80%) of revenues are now
earned outside South Africa.
• Annuity income (i.e. subscription
revenues, IVAS and gaming)
accounted for 55% of revenues, down
1% YoY due to the negative impact of
currency weakness in SSA on US$-
reported subscriptions revenues.
• Advertising revenue, which is cyclical
in nature, is only 13% of total revenue.
Asia (65%) IVAS & games (40%)
South Africa (16%) Subscription (15%)
Europe (10%) Ecommerce (19%)
Advertising (13%)
Rest of Africa (5%)
Print, circulation & distribution (1%)
Latin America (2%) Technology (1%)
Other (2%) Other (11%)
1 Based on economic-interest, i.e. assuming equity-accounted investments are proportionately consolidated.
27Development spend on downward trend as businesses turn profitable
Development spend (US$m)1
-12% (-12%) • Development spend reflects the
1 084 trading losses incurred by businesses
956
427 yet to reach scale.
961 372
• Our proportionate share of
657 584 development spend of equity-
accounted investments (i.e. the
difference between development
FY16 FY17 FY18 spend on an economic interest and
consolidated basis), amounted to
Older investments New investments
US$287m (US$223m in FY17).
• This number does not impact our
Incremental development spend by segment, YoY (US$m)1 cash flow as losses incurred by
equity-accounted investments are
funded by the capital already raised.
YoY change (%) -18% -14% -7% 27% 2% -12% (-12%)
• Spending on new investments
decreased by US$55m (13%) and is
(116) (11) 61 18
(80) mainly related to lower spend in
1 084 letgo, partially offset by investments
956 in Delivery Hero, Swiggy, Showmax
Poland and Kreditech.
• We also saw an 11% decline
FY17 Ecommerce Video M&A and Media Equity accounted Forex FY18 (US$73m) in funding of older, more
entertainment investments
established businesses, most notably
an 18% reduction in classifieds spend
1 Developmentspend represents trading losses of developing businesses yet to reach scale. Results reported on an economic-interest basis, i.e. (excluding letgo).
equity-accounted investments are proportionately consolidated. Numbers in brackets represent year-on-year growth in local currency, excluding M&A.
28Consolidated development spend also trending downwards
Development spend (US$m) -22% (-17%) • Consolidated development spend
861 was down 17% YoY (US$192m) as
the ecommerce businesses
669
427
continued to scale, resulting in
708 271 improved profitability.
434 398 • Funding of older, more established
businesses declined 8% or
US$36m.
FY16 FY17 FY18
• Development spend for new
Older investments New investments businesses was down 22% YoY, a
decrease of US$157m.
Incremental development spend by segment, YoY (US$m) • Funding of DTT and Showmax
Africa are no longer included in
development spend.
YoY change (%) -18% -14% 28% -10% 2% -22% (-17%)
(116)
(11) 5 (85) 15
861
669
FY17 Ecommerce Video entertainment Media M&A Forex FY18
Numbers in brackets represent year-on-year growth in local currency, excluding M&A.
29Trading profit – a marked improvement on last year
Incremental trading profit by segment, YoY (US$m)1
• The YoY trading profit growth rate
YoY change (%) 24% 33% 24% -100% -8% 5% 47% (52%) accelerated by 15% (in local currency,
excluding M&A), from 37% in the prior
(6) (185) year to 52% this year.
897 67 115
193 • Meaningful reductions in losses from
3 403 classifieds, payments and the travel
2 322 businesses improved ecommerce’s
profitability.
FY17 Ecommerce Social & internet Video Media M&A & other Forex FY18
• Tencent’s strong operating
platforms Entertainment performance, i.e. 33% YoY in local
currency boosted the contribution by
social & internet platforms and the
Split by segment (US$m) Trading profit growth by segment YoY (%)1 group’s overall trading profit.
FY17
FY18
• Video-entertainment’s trading profit
52% increased 24% as the SA business
42% maintained profitability and losses in
37% 33%
Internet (89%) 24% 24% sub-Saharan Africa stabilised.
Video entertainment (11%) • The disposal of Allegro in FY17 had a
(5%) negative impact of US$137m on
(32%) trading profit in the current year.
Naspers group Ecommerce Video Social & internet
entertainment platforms
1 FY17restated for the change in the calculation of trading profit regarding Tencent’s digital content amortisation.
Results reported on an economic-interest basis, i.e. equity-accounted investments are proportionately consolidated. Numbers in brackets represent
year-on-year growth in local currency, excluding M&A.
30Improving operating leverage across ecommerce
• Total ecommerce trading losses
YoY change in trading profit margins (%)1
TP Margin FY17 reduced to US$673m, with the
negative trading margin improving
TP Margin FY18
from -35% last year to -19% this year.
• Margins improved across the
5% ecommerce segment – the only
exception being food delivery, where
-15% we stepped up our investment in
iFood to expand into Mexico and
3%
(27%) Argentina.
-35%
• Classifieds accelerated revenue
16% 18% growth and more than doubled
-55% trading profits. The segment turned
profitable (excluding letgo).
• Our share of MMT’s losses reduced
-75%
49% 19% YoY as the business benefited
59% from healthy growth in gross bookings
and transaction volumes.
• Including the new investments in
Ecommerce Classifieds Etail Travel Payments2 Food delivery Remitly and Kreditech, payments
improved its negative trading margin
from -37% to -19%.
1 Results exclude Allegro and Flipkart and are reported on an economic-interest basis. Equity-accounted investments are proportionately consolidated.
2 US$8m in corporate IT charges, which are not directly associated with payments operations, have been excluded from the FY18 trading margin.
31Profitable ecommerce contribution now equal to VE
• The graphs reflect the performance of
Financial progress of profitable ecommerce entities (US$m)1 our current portfolio and exclude the
impact of profitable businesses that
have been disposed of (such as
137% (77%)
Allegro in FY17).
1 656 • Trading profit from profitable
businesses increased 52% YoY, on
revenue growth of 77%.
• eMAG Romania (etail) became
profitable during the year, which has
been a major driver of the revenue
growth in profitable businesses, as
698 well as etail being the largest revenue
54% (52%) segment.
443
352
122 229
FY16 FY17 FY18
Revenue Trading profit
1 Results
are reported on an economic-interest basis, i.e. equity-accounted investments are proportionately consolidated. Numbers in brackets
represent year-on-year growth in local currency, excluding M&A. FY16 and FY17 numbers exclude revenue and trading profit associated with
disposed entities, reflecting amounts on a like-for-like basis.
32Classifieds: OLX turned profitable and FCF generative
OLX group revenue (US$m)1 OLX group trading profit/(loss) (US$m)1 • The segment (excluding
letgo) turned profitable,
mainly due to higher
46% (34%) revenues and savings in
marketing spend (also in our
624 joint ventures).
181% (156%) • Revenue growth was
underpinned by strong
growth in Avito and
63
European markets (led by
426 Poland, Ukraine and
Romania), as well as
(78) increased levels of
monetisation.
(192)
266
FY16 FY17 FY18 FY16 F17 F18
1 Results
reported are on an economic-interest basis, i.e. equity-accounted investments are proportionately consolidated. Numbers in brackets represent YoY
growth in local currency, excluding M&A. All numbers exclude letgo. FY16 results reflect pro-forma numbers, assuming the consolidation of Avito for the full-
year.
33Payments: strong revenue growth and margin improvement
Revenue and trading loss (US$m)1 • Payments continue to grow
and scale toward
profitability.
58% (37%)
• Revenue growth of 37% was
driven by a 27% increase in
294
transactions and a 53%
increase in total payment
volume to more than
186 US$25bn.
140 • Losses narrowed and
negative margins narrowed
19% (53%) from -37% to -19%.
(59) (69) (56)
TP Margin -42% TP Margin -37% TP Margin -19%
FY16 FY17 FY18
Revenue Trading loss
1 US$8min corporate IT charges, which are not directly associated with payments operations, have been excluded from the FY18 trading loss above.
Information is reflected on an economic-interest basis; numbers in brackets represent YoY growth in local currency, excluding M&A.
34Food delivery: scaling fast and delivering topline growth
• Food delivery trading losses
Food delivery (segment results), (US$m)1 iFood – investing in further growth (US$m) increased YoY due to
iFood’s more aggressive
213% (121%) marketing strategy aimed at
attracting new customers
166 and accelerating growth.
121% (121%)
• Delivery Hero reported a
117 strong set of FY17 results,
growing revenues by 60%,
driven by a 48% increase in
order numbers YoY to
292m.
53 53
5 5
(30) (6)
FY17 FY18 FY17 FY18
Revenue Trading (loss)/profit Revenue Trading (loss)/profit
1 Information is reflected on an economic-interest basis; numbers in brackets represent YoY growth in local currency, excluding M&A.
35Travel: cost-saving opportunities created by the MMT/ibibo merger
Revenue and trading loss (US$m)1 • MakeMyTrip (MMT) solidified
its position as leading online
124% (21%) travel agency in India and
seized cost-saving
276 opportunities created by the
merger with ibibo last year.
• In May 2017, Naspers
contributed US$132m (40%)
in a US$330m funding round
123 to support further growth.
91
• MMT continues to focus
31% (21%) investment on the under-
penetrated high-growth
(89) (88) (61) online hotels segment.
• At 4QFY18 (Mar) MMT
TP Margin -22%
reported 167m total unique
TP Margin -98% TP Margin -72%
visitors and 18m monthly
active mobile users.
FY16 FY17 FY18
Revenue Trading loss
1 Informationis reflected on an economic-interest basis; numbers in brackets represent YoY growth in local currency, excluding M&A on a like-for-like basis.
Naspers incorporates MMT results on a 3-month lag basis. FY16 and FY17 reflects the ibibo results prior to the MMT/ibibo merger.
36VE: subscriber growth and cost optimisation drive growth
Video entertainment financials (US$m) Revenue
• Financials impacted by local currency
Trading profit pricing vs. US$ input costs.
8% (7%) • The segment reported 8% revenue
growth (7% in local currency) with
3 680 higher subscription revenues – due
3 413 3 401
to higher subscriber base and annual
29% (24%) price increases.
• Overall profitability improved 29%
287 (24% in local currency) as revenue
610 369 growth was supplemented by cost
FY16 FY17 FY18 optimisation initiatives.
• The decline in capex is due to the
business being at the end of the DTT
Capital expenditure (US$m) Programming and production costs (US$m) investment cycle and our new
5% customer care and billing platforms
being largely completed in the prior
161 1 246 year.
42% 1 191
107 • Programming costs largely increased
due to additional investment in local
62 1 052 content.
FY16 FY17 FY18 FY16 FY17 FY18
Numbers in brackets represent YoY growth in local currency.
37VE: solid performance from SA, despite challenges SSA losses stabilised
ZAR strengthened vs US$ … … which, together with subscriber growth, boosted results (US$m) • Higher SA subscriber
8% (3%)
revenue (9% sub growth,
FY16 FY17 FY18 ~3% price hikes) and
3 145 content savings, boosted
8% 2 899
South Africa
2 604 by a stronger ZAR, drove
profitability.
-1% 15% (6%)
• The SA business generated
-25% US$522m in free cash flow.
738 851
701
• 13% profit growth
FY16 FY17 FY18 organically offset by FX
Revenue Trading profit impact.
• Savings from the
Naira continues to weaken… ... but control and renewed sub growth led to some stability (US$m)
elimination of non-
performing content also
FY16 FY17 FY18 1% (10%) contributed to losses
Sub-Saharan Africa
1 135 stabilising.
-14% 964 975
-25% • Trapped cash reduced
-2% (+13%)
from US$289m in FY17 to
-44%
US$131m (mainly Angola
(38) and Zimbabwe) due to
(358) (364)
liquidity improvements in
FY16 FY17 FY18 Nigeria.
Reflecting change in average rates for the
reporting periods Revenue Trading loss
38Social & internet platforms: healthy contributions, investing for growth
• Tencent delivered revenue of
RMB238bn which translated into top-
line growth of 56% YoY. Growth was
Tencent revenue (RMBm)1 Mail.ru revenue (RUBm)2 across all revenue segments.
56% 34%
237 760 57 469 • Growth in Tencent’s operating profit
was lower at 41% YoY due to higher
42 751 channel costs in smart phone games
151 938 37 227
102 863 and investment in content.
• We trimmed our Tencent holding by
2015 2016 2017 2015 2016 2017 selling a 2% stake in March this year
for proceeds of US$9.8bn. This is the
Tencent operating profit (RMBm)1 Mail.ru EBITDA (RUBm)2 first time, since our initial investment
in 2001, that we have sold any
41% shares.
15%
82 023
• Mail.ru achieved organic revenue
20 551
58 154 18 086 17 914 growth of 18% YoY, mainly driven by
41 764 growth in online-advertising and
massively multipiplayer online
(MMO) games, as well as in online
2015 2016 2017 2015 2016 2017 food delivery (Delivery Club).
1 Reflects
100% of Jan-Dec 2017 (FY17), detailed results available at 2 Reflects100% of Jan-Dec 2017 (FY17) results on a non-GAAP basis;
www.tencent.com. FX rate: FY18 US$/RMB6.5920 (FY17 6.7448). detailed results available at www.corp.mail.ru.
• Trading profit growth was affected
Operating profit reported on a non-GAAP basis. FX rate: FY18 US$/RUR57.6683 (FY17 62.7623).
by investments to grow Delivery
Note: Financial information as per financial years ending December, which differs from the Naspers reporting period. Equity-accounted Club, Youla and Beepcar.
investments are included on a 3-month lag basis.
39Segmental detail
Revenue EBITDA Trading profit
FY18 FY17 % FY18 FY17 % FY18 FY17 %
US$'m US$'m Change US$'m US$'m Change US$'m US$'m Change
Internet 15 928 10 621 50% 3 382 2 282 48% 3 053 2 030 50%
Social and internet platforms 12 281 7 692 60% 3 997 2 964 35% 3 726 2 761 35%
- Tencent1 12 024 7 506 60% 3 925 2 888 36% 3 675 2 701 36%
- Mail.ru 257 186 38% 72 76 -5% 51 60 -15%
Ecommerce 3 647 2 929 25% (615) (682) 10% (673) (731) -8%
- Etail 2 060 1 659 24% (248) (258) 4% (270) (281) 4%
- Travel 276 123 >100% (59) (87) 32% (61) (88) 31%
- Marketplaces - 327 -100% - 146 -100% - 137 -100%
- Payments 294 186 58% (60) (66) 9% (64) (69) 7%
- Classifieds 628 426 47% (99) (319) 69% (114) (328) 65%
- Food delivery 166 53 >100% (20) 5 >-100% (30) 5 >-100%
- Other 223 155 44% (129) (103) -25% (134) (107) -25%
Video entertainment 3 680 3 401 8% 627 520 21% 369 287 29%
- South Africa 3 145 2 899 8% 1 006 862 17% 851 738 15%
- Sub-Saharan Africa 975 964 1% (271) (260) -4% (364) (358) -2%
- Corporate and other2 (440) (462) 5% (108) (82) -32% (118) (93) -27%
Media 507 588 -14% 10 40 -75% 3 19 -84%
Corporate and intersegmental (18) (48) -58% (22) (14) -57% (22) (14) -57%
Economic interest 20 097 14 562 38% 3 997 2 828 41% 3 403 2 322 47%
Less: Equity-accounted investments (13 437) (8 464) -59% (3 739) (2 756) -36% (3 444) (2 536) -36%
Consolidated 6 660 6 098 9% 258 72 >100% (41) (214) 81%
1 EBITDA and trading profit has been adjusted to include the amortisation expenses regarding Tencent’s digital content business.
2 Includes intergroup eliminations for content and other sales between South Africa and sub-Saharan Africa, as well as our technology and Showmax.
40Free cash inflow: increased profitability converts into cash generation
• Ecommerce cash generation is
Consolidated trading profit from profitable Sources of free cash inflow (US$'m)1 improving - classifieds and
ecommerce businesses (US$m) payments have replaced
1 101
Allegro’s contribution.
32
989 31 • Classifieds (excluding letgo) is
33 cash generative in aggregate
52% 35
269 and generated 77% more free
152 Internet
cash than last year.
Internet
53% • Stable free cash flow (FCF) from
42%
191 South African video
247 entertainment has been
impacted by changes in working
capital (mainly prepaid sports
347 content rights renewals), but
Other this will reverse next year.
Payments
229 578 • We receive increasing dividends
522 Classifieds from Tencent YoY. In FY18 the
Tencent dividend Tencent dividend increased
29% YoY.
VE SA
• One of our key focus areas is to
FY17 FY18 further accelerate the path to
FY17 FY18
profitability and cash
1 FCFdefined as EBITDA less adjustments for non-cash items, working capital, taxation, capital expenditure, capital leases repaid and investment income. generation in our core
Allegro excluded from all comparatives. segments.
41FCF from operations offset by changes in working capital
US$m FY17 FY18 • Free cash flow (FCF) positively impacted by:
‐ US$268m increase in cash from
EBITDA 72 258 operations (excluding working capital) is
Working capital 141 (255) mainly due to a higher contribution
Non-cash items 81 138 from profitable businesses;
Cash generated from operations 294 141 ‐ US$34m reduction in capex; and
‐ Dividend from Tencent increasing by
Capital expenditure (173) (139)
US$56m to US$247m.
Finance leases (106) (104)
Taxation (333) (391) • Offset by working capital outflows:
Investment income 193 251 ‐ From video entertainment due to
Free cash flow (FCF) (125) (242) investment in set-top box inventory and
pre-payments regarding sports content
rights renewals; and
FCF breakdown (US$m) ‐ Investment in etail inventory ahead of
seasonal sales events.
268 (29) • Disposal of Allegro in FY17 also impacted
(125) negatively, reducing cash from operations
(421) (242) in the current period by US$192m.
37 • Excluding the negative impact of VE in SSA,
58 FCF would have been positive.
(58) 36
FY17 Cash from ops Working capital Tax paid Capex and leases Investment FY18
income
42Holding company sources of cash and commitments
• The inflows increased by 5%,
US$m FY17 FY18 with the loss of cash from
Allegro, following its disposal,
Cash remitted by Holdco: replaced by cash inflows from
classifieds.
Tencent dividend 191 247
VE segment dividend1 370 350 • The loan to value ratio was
Allegro 60 - stable at 3%.
Classifieds portfolio 46 106
Total inflows 667 703
Commitments:
Holdco – operating costs (97) (110)
Available for interest/dividends 570 593
Holdco interest cost (6 months) 192 183
Interest cover 3.0 3.2
Loan to value (Debt: marketable securities) 3% 3%
1 ZARcomponent reflected at same FX rate that forward cover entered into to cover interest payments for next 12 months
from this dividend.
43Recent M&A activity
• Optimisation of the portfolio
Acquisition spend over time (US$m) Investments FY19 YTD (US$m) Exits (US$m)1
happens on an ongoing basis.
2 222 • In FY18 we invested US$2.2bn
173 in new opportunities:
190
‐ Delivery Hero (US$1.3bn)
2 200 ‐ Takealot (US$202m)
89 ‐ MakeMyTrip (US$155m)
1 495 ‐ Swiggy (US$121m)
Total 2 373 ‐ Remitly (US$100m)
35 ‐ Kreditech (US$99m)
‐ Flipkart (US$71m)
‐ Autotrader (US$41m)
80 Trim down (US$m)2 ‐ Other (US$136m)
• We received US$10bn from
9 763 disposals in FY18, made up
primarily of proceeds from
553
the trim down of our Tencent
262 stake and the Souq disposal.
Total 394 Total 9 763
FY16 FY17 FY18
1 The sale of our 11.18% fully-diluted stake in Flipkart for US$2.2bn was announced in May 2018 and is subject to regulatory approval; the transaction is expected
to be concluded in FY19.
2 Tencent stake was reduced from 33.2% to 31.2% in March 2018.
44Internal rate of return (IRR) well above cost of capital
All internet investments excluding Tencent Current internet portfolio excluding Tencent • If you consider all internet
(FY08 –FY17) (US$bn)1 (US$bn)2 investments (excluding Tencent)
since 2008 against current market
17% IRR valuations, we generated an IRR of
17%. (Including Tencent close to
23% IRR 50%).
• If you apply the same approach to
2.2X 2.2X existing assets, the overall return is
23% - significantly ahead of the
Nasdaq and many of our peers.
• Considering our cost of capital of
23.0
~12%, we have essentially doubled
19.0 our money over a relatively short
period.
10.5 • This track record (including 32%
8.5
Flipkart IRR) and our disciplined
approach to capital allocation,
provides us with confidence that we
Total invested capital Market & analyst Invested capital current Market & analyst can generate great returns for
valuation portfolio valuation shareholders by investing in growth
opportunities.
1 IRR calculated using market and analyst valuations for all internet assets (excluding Tencent) including disposed and discontinued businesses 2006 - 2017.
2 Market and analyst valuations for current internet portfolio (excluding Tencent as at 30 September 2017).
45Summarised income statement
US$m FY172 FY18 • Increase of US$1 448m in share of equity
accounted investments:
‐ Mainly attributable to Tencent
Revenue1 14 562 20 097
(US$3 616m),
Less: Equity-accounted investments (8 464) (13 437)
‐ offset by losses from new investments
Consolidated revenue 6 098 6 660 including MMT, Delivery Hero and
Kreditech.
Trading profit (214) (41)
• (Losses)/gains on acquisitions and
Trading margin -4% -1%
disposals:
‐ Loss on disposal of Novus (US$145m)
Net finance costs (485) (246) ‐ Gain on disposal of Souq (US$89m).
Re-measurement of put options liabilities (622) (252)
Share of equity-accounted results 1 829 3 277 • Impairments include the closure of the
Gains/(losses) on acquisitions and disposals 2 169 (93) classifieds JV in Bangladesh, and losses
Dilution (losses)/gains on equity-accounted investments (119) 9 216 regarding the classifieds JV in Thailand and
Impairments (58) (89) various other write-offs.
Taxation (244) (360)
• Tax paid is up YoY due to increased
Net profit 2 168 11 298 profitability, particularly in the video-
entertainment segment.
Core headline earnings 1 454 2 507
Core headline EPS (US$) 337 581
1 Based on economic-interest, i.e. equity-accounted investments are proportionately consolidated.
2 FY17 results restated for the group’s change in accounting policy regarding put option liabilities and the change in the calculation for
trading profit and core headline earnings regarding Tencent’s digital content amortisation.
46Finance costs down YoY
US$m FY171 FY18 Interest paid and received
• Net finance costs on borrowings (net of interest on loans and
bank accounts) was down 14% to US$122m benefiting from lower
Interest paid (278) (267) utilisation of credit facilities and the 4.85% coupon achieved on
Loans and overdrafts (198) (196) the new US$ bond issued in July 2017.
Transponder leases (46) (51) • The RCF facility of US$2.5bn was unutilised at 31 Mar 2018.
Other (34) (20) Other finance costs
• Translation of foreign assets and liabilities primarily relates to
Interest received 70 88 intergroup loans.
Loans and bank accounts 56 74 Re-measurement of written put option liabilities
Other 14 14
• The change in accounting policy for put options has significantly
impacted other finance costs.
Other finance costs, net (277) (67)
Translation of foreign current assets and liabilities (243) (12) Debt
Translation of transponder leases 42 98 • US$1bn 7yr bond issued July 2013 (6% coupon).
• US$1.2bn 10yr bond issued July 2015 (5.5% coupon).
Translation of forward exchange contracts (FECs) and
(76) (153) • US$1bn 10yr bond issued July 2017 (4.85% coupon) - proceeds
cross-currency interest rate swaps
were used to repay the US$700m bond which matured in July
2017, with the remaining proceeds to be used for general
Re-measurement of put option liabilities (622) (252) corporate purposes, including M&A.
Total finance costs (1 107) (498)
1 FY17 has been restated for the group’s change in accounting policy regarding put option liabilities.
47Contribution by associates and joint ventures
Company PPA IFRS Other Core HEPS • Equity accounted results include, amongst
FY18 (US$m) others, investments in Tencent, Mail.ru,
results adjustments results adjustments contribution
3 616 - 3 616 (328) 3 288
MMT, Delivery Hero and Flipkart.
Tencent
Mail.ru 12 (3) 9 28 37 • “Other adjustments” relate to headline and
core headline earnings (COHE) adjustments
MakeMyTrip (97) (6) (103) 27 (76) similar to Naspers methodology.
Delivery Hero (28) (3) (31) 10 (21)
• These include:
Other (206) (8) (214) 27 (187) - Equity-settled share-based payments
Total 3 297 (20) 3 277 (236) 3 041 - Fair-value adjustments and forex
- Profit/losses on disposals of non-current
FX conversion rates: Tencent - US$/RMB6.5920 (6.7448); Mail.ru – US$/RUB57.6683 (62.7623)
assets
- Impairments
Equity-accounted investments’ contribution to core headline Associate and joint venture contributions (US$m) - Gains/losses on acquisitions and
earnings (US$m)
disposals
692 - Amortisation charges on intangible
(20) (236)
assets related to business combinations.
381 • Once-off gains relate primarily to business
3 297 3 277 3 041 2 585 combination-related gains/losses
251
recognised by associates and joint ventures.
1 448
1 038 • The growth in FY18 is primarily driven by
Tencent, which contributed US$3 616m (of
Company PPA IFRS results Other Core HEPS FY 16 FY 17 FY 18 which US$692m relates to gains on mergers
results adjustments adjustments Contribution and acquisitions and is therefore reflected
Once-off adjustments Normal contribution
as a once-off adjustment).
48Core headline earnings growing strongly
Trend in core headline earnings per share (US$)1 • Core headline earnings (which excludes once-
off and non-operating items such as
72% amortisation of intangible assets recognised in
CAGR +45% business combinations, etc.), is not defined
5.81
under IFRS, but is aimed at providing a useful
measure of the group’s operating
performance.
3.37
2.76
• In FY18 we changed our methodology for
calculating this metric by including the cost of
content amortisation relating to Tencent’s
FY16 FY17 FY18 digital content business, which has been
growing rapidly in recent years. We believe
this better reflects the true operating
Incremental core headline earnings drivers, YoY (US$m)1
expenses of the group.
173 (5) 34 (57) • Core headline earnings per share increased
72% YoY, benefiting from a:
948 - 22% reduction in development spend, and
(40) 2 507 - 45% increase in income from associates.
1 454
• Adjustments to reported earnings to arrive at
core headline earnings are also applied to the
contribution from equity-accounted
FY17 Forex Equity Consolidated Minorities Net interest Taxation FY18 investments. These adjustments have tax and
accounted trading profit cost non-controlling interest effects that are
investments similarly adjusted for in arriving at core
1 Prior
year results have been restated for the group’s change in the calculation of trading profit and core headline earnings related to headline earnings.
Tencent’s digital content amortisation. 49Core headline earnings reconciliation
• Main contributor of COHE growth was
Tencent, contributing US$3.3bn (+47%
US$m FY171 FY18 YoY)
• Decreased consolidated trading losses
(down 81% YoY) fuelled growth.
Headline earnings 188 1 794 • The above was partially offset by higher
losses of associates and joint ventures,
Equity-settled share-based payment expenses 296 435 including MMT, Delivery Hero, Swiggy
and Kreditech.
Amortisation of other intangible assets 169 190
• Fair-value adjustments and currency
Business combination losses 44 20 translation difference were impacted by
the re-measurement of put options and
Retention option expense 1 8
losses on the cross currency interest
Fair-value adjustments & currency translation rate swap.
756 60
differences
• The diluted earnings, diluted headline
Core headline earnings 1 454 2 507 earnings and diluted core headline
earnings figures presented include a
1 FY17 restated for the change in the calculation for core headline earnings related to Tencent’s digital content amortisation. decrease of US$49m (FY17: US$24m)
relating to the future dilutive impact of
potential ordinary shares issued by
equity-accounted investees.
50Tencent contribution to core headline earnings
FY17 FY18
Tencent FY16 (Dec) Naspers’s share Tencent FY17 (Dec) Naspers’s share
(RMBm)1 (US$m) (RMBm) (US$m)
Tencent profit attributable to equity holders 41 095 2 037 71 510 3 616
Adjustments to core: 4 385 200 (6 360) (328)
- Impairment of investments 5 425 268 3 086 155
- Share-based payments2 5 123 246 6 875 346
- Fair-value adjustments and gains and losses on acquisitions and disposals (7 770) (393) (18 051) (916)
- Losses/(profit) on disposals of non-current assets 60 3 24 1
- Amortisation charges3 1 547 76 1 706 86
Tencent’s contribution to Naspers core headline earnings 2 237 3 288
1 100% of Tencent Holdings Limited’s results as reported in its annual reports.
2 Allshare-based payments adjusted for as the split between equity and cash-settled awards is not always available.
3 FY17 amortisation adjustment restated for the change in the treatment of Tencent’s digital content amortisation.
51Balance sheet reinforced with cash to pursue future growth opportunities
• The US$9.8bn raised from the recent
US$m FY17 FY18
trim of our Tencent stake has resulted
Debt1: (offshore US$3.2bn) (2 898) (3 216) in a very strong balance sheet at year-
end.
Cash: (South Africa US$398m) 4 003 11 368
• We intend using the cash available to
Closing net cash 1 105 8 152 settle put options and to fund our
growth ambitions.
Gearing2 -9% -32% • Group debt includes US$3.2bn in
Interest on loans and overdraft (198) (196) US$-denominated bonds.
1 Excludes satellite lease liabilities (US$1.2bn) and non-interest bearing debt (US$207m).
2 FY17
• Debt covenants related to RCF:
restated for the group’s change in accounting policy for put option liabilities.
- Net debt/adjusted EBITDA 4.5x
Group net consolidated cash/(debt) (US$m) • US$398m of total cash is held in ZAR.
• The remainder (96%) of the total cash
8 152 (US$10.96bn) is held offshore, mainly
in US Dollar, EURO, Polish Zloty,
Brazilian Real and Indian Rupee.
1 105
(1 213)
FY16 FY17 FY18
52Debt maturity profile and debt position
Debt maturity profile (US$m) • The group amended its RCF in
April 2018 which extended the
facility for a further five year
period, maturing in April 2023.
• Apart from extending the maturity
Group RCF
date, the facility was amended to
US$2 500m
be more in line with the group’s
Bond
Bond
US$1 200m Bond current credit profile.
US$1 000m US$1 000m
• It allows more flexibility to
leverage the significant value of
CY19 CY20 CY21-22 CY23 CY25 CY27
our marketable securities to raise
additional financing and the
financial covenants related to
MultiChoice South Africa have
Split of cash reserves (US$m) Split of debt obligations (US$m)
been removed.
398 • The US$2.5bn RCF facility was
South Africa undrawn at 31 March 2018.
Offshore (US$ & EUR)
Offshore (US$ & EUR)
10 970 3 216
53Current assets and liabilities
• The increase in other receivables relates
largely to video-entertainment content
prepayments and an increase in
Current assets (US$m) FY17 FY18 Current liabilities (US$m) FY171 FY18 merchant receivables at PayU.
Inventory 154 231 Current portion of long-term debt 915 280
• Cash and deposits have increased
largely due to the proceeds of US$9.8bn
received from the trim down of the
Programme and film rights 193 240 Trade payables 487 564
Tencent investment.
Trade receivables 420 452 Accrued expenses and other 1 827 3 132 • Souq and Novus were reported as held
for sale in FY17. Subsequently, Souq was
Other receivables 456 762 Tax payable 17 31 disposed of and Novus unbundled in
the current year.
Derivative financial assets 6 11 Derivative financial liabilities 119 129 • The current portion of long-term debt
decreased by US$635m, primarily due
Cash and deposits 4 007 11 369 Bank overdraft and call loans 4 1 to the repayment of the 2017 bond
(US$700m) on maturity in July 2017.
Assets held for sale 403 - Liabilities held for sale 70 - • Following the change in the group’s
accounting policy, put option liabilities
Total 5 639 13 065 Total 3 439 4 137 of US$1.5bn (FY17: US$510m) were
included in accrued expenses and other
1 FY17 has been restated for the group’s change in accounting policy for put option liabilities. current liabilities.
54Capital expenditure
Split by business • Maintenance capex expected to
US$m FY17 FY18 change as the business evolves.
• Current estimates for maintenance
Land, buildings & manufacturing equipment 30 43 capex are:
- Media24FX exposure: hedging
Open FEC positions
• Video entertainment: US$704m and €69m (programming
US$ FX Cover US$m ZAR rate rights and leases).
• Corporate: US$144m (Bond/RCF interest hedge).
12 months out 643 14.42
Hedging strategy
24 months out 205 14.36 • FECs not viable outside of SA, thus exposure in rest of Africa
mostly not hedged.
• Video entertainment: cover 100% of net SA exposure under
18 months; up to 100% between 18-24 months forward.
• Almost all FEC’s qualify for hedge accounting.
EUR FX Cover EURm ZAR rate
12 months out 100 17.25 Video entertainment currency dynamics
• Pricing in local currency.
24 months out 41 17.63 • ~40% of input costs in US$.
• We cover up to 100% of net SA exposure 18-24 months forward.
• We utilise mechanisms in SSA to hedge where possible.
56APPENDIX
Group structure
Global platform operator
Internet Video
Media
entertainment
Social &
internet
Classifieds B2C Payments Naspers Ventures platforms
100%1 79.3% 97.6% Food Ventures 31.2% 80% 85%
71.2% 96.1% 37.6% 77.4% 24.5% 28.4%
51.8% 43.1%3 22.6% 60.7% 12.1% 100%
73.4%2 12.4%4 22.8% 21.1%
21.9% 13.5% 80%
34.1% 80%
20.0% 80%5
1) OLX owns 50% of operations in Brazil and 40.5% of Indonesia. 7.5% 100%
2) Our effective interest in letgo USA (B.V) is 47.2% held through Ambatana Holdings.
3) MMYT is listed on the Nasdaq stock exchange.
4) We announced the disposal of our 12.4% (fully diluted 11.2%) stake in Flipkart in May 2018. The transaction is subject to regulatory approval, expected to close in FY19.
5) Showmax SA is held 80%, other Showmax operations are held 100%.
6) In June 2018, the group committed to an investment of US$80m in Swiggy. Following this investment, the group will hold a 24% effective interest (23% fully diluted).
*Organogram depicts effective percentage holdings in major entities as at 31 March 2018. 58You can also read
