Prosus N.v. Class N · EURONEXT:PRX
Prosus N.v. Class N — Debt Investor Presentation (October 2019)
46 slides from Prosus N.v. Class N's debt investor presentation, October 2019
Slide 1: Fixed Income Investor Update
Fixed Income Investor Update October 2019
Slide 2: Disclaimer
Disclaimer THIS PRESENTATION IS NOT AN OFFER OR AN INVITATION TO BUY OR SELL SECURITIES IN ANY JURISDICTION. This presentation has been prepared by Prosus N.V. (the “Company”), a subsidiary of Naspers Limited (“Naspers”), solely for informational purposes. By attending a meeting where this presentat
Slide 3: Disclaimer (cont'd)
Disclaimer (cont’d) To the fullest extent permitted by law, neither Naspers, the Company nor any of their respective subsidiary undertakings or affiliates, directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for (whether in contract, tort or otherwis
Slide 4: Agenda
Agenda 1 Overview 2 Credit highlights 3 Financial overview 4 Outlook 4
Slide 5: Snapshot of Prosus
Snapshot of Prosus $120bn $128bn $18.3bn Market value of Market cap FY19 Revenues4 selected listed interests2 $6.0bn $0.7bn $3.4bn Sources of positive Net cash1 FY19 Trading profit4 free cash inflow3 1. Gross debt of $3.2bn and Cash of $9.2bn as of 30 June 2019, gross debt excluding eMag debt 2. Agg
Slide 6: Prosus is a truly global consumer internet platform
Prosus is a truly global consumer internet platform Global Assets 34 20 39 countries Classifieds countries Fintech countries Food Delivery USA France Netherlands Germany Poland Romania 1 India UAE Source: Company information 6 1. Pending regulatory approval
Slide 7: Overview
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Slide 8: Prosus, the largest consumer internet company in Europe
Prosus, the largest consumer internet company in Europe Highlights: 26% free float1 100% Listed • Europe’s largest listed on JSE Online food consumer internet company Classifieds delivery • Access to a large and supportive investor capital base Plus many more • Highly visible and transparent Holds 7
Slide 9: Uniquely positioned to build sustainable leadership positions
Uniquely positioned to build sustainable leadership positions Uniquely positioned as an operator and an investor Partner with local entrepreneurs to build businesses with platform potential… Operator … to address major societal needs Benefit from operations in Payments & local markets Trade Food Cre
Slide 10: Prosus is led by the same experienced and entrepreneurial Naspers team
Prosus is led by the same experienced and entrepreneurial Naspers team BOB VAN DIJK BASIL SGOURDOS MARTIN SCHEEPBOUWER LAURENT LE MOAL LARRY ILLG Group CEO Group CFO CEO Classifieds CEO Payments & Fintech CEO Food and Ventures 15+ years industry experience 20+ years industry experience 15+ years ind
Slide 11: Credit highlights
Credit highlights
Slide 12: Credit highlights
Credit highlights 1 2 3 4 5 PORTFOLIO OF LEADING CORE BUSINESS PROVEN INVESTMENT HIGHLY DIVERSIFIED STRONG BALANCE GLOBAL INTERNET SEGMENT CASH FLOWS TRACK RECORD AND BUSINESS MIX SHEET BUSINESSES GAINING MOMENTUM CASH REALISATION Leading positions in multiple Diversified business mix across Healthy
Slide 13: Portfolio of leading global internet businesses
1 Portfolio of leading global internet businesses CLASSIFIEDS PAYMENTS & FINTECH FOOD DELIVERY A world without financial borders where Transform the way people consume, Empowering people to upgrade their lives everyone can prosper source and experience food Industry Dynamics Total Addressable Market
Slide 14: Diversified business mix: Classifieds
2 Diversified business mix: Classifieds 54% 1 Geographic footprint and brand portfolio Key brand KPIs (RUBbn) A leading position in 30 28% 35% markets2 21 16 9 12 Revenue Trading Profit >350m MAU3 FY'18 FY'19 40% 21% Growth: >2x industry average4 Revenue Trading Profit FY'18 FY'19 Horizontal
Slide 15: Diversified business mix: Payments & Fintech
1 23% 2 Diversified business mix: Payments & Fintech Geographic footprint and brand portfolio Key focus areas 300+ payment options • PayU is the core payments platform • A leading payment gateway for Payments merchants in high-growth markets >$30bn processed and large cross-border players payment va
Slide 16: Diversified business mix: Food Delivery
1 24% 2 Diversified business mix: Food Delivery Geographic footprint and brand portfolio Key brand KPIs Leading positions in 33 of 39 countries5 A leading position in 35 Covering 1.2bn people markets3 310k+ restaurant partners Consolidation with Covering >4.0bn people Takeaway.com6 Market leader in
Slide 17: Core business segment cash flows gaining momentum
3 Core business segment cash flows gaining momentum Consolidated trading profit from profitable ecommerce businesses Sources of positive free cash inflow ($m)2 ($m) 16% (44%) 1 22% 666 399 Total 1 546 36 343 Other 3 Payments 31 and Fintech 287 Classifieds 265 342 Tencent 247 Dividend3 FY'18 FY'19 FY
Slide 18: Proven investment track record and cash realisation
4 Proven investment track record and cash realisation All Internet investments (incl Current Internet companies (ex Strong track record of value creation and cash realisation Tencent) Tencent)1 FY’02 – FY’19 ($bn)2 FY’08 –FY’19 ($bn)2 29% IRR $10bn 41% 165 20% $616m $2.2bn4 sale of 2% stake5 $15.4
Slide 19: Significant liquid asset base leading to low LTV
5 Significant liquid asset base leading to low LTV Bond and liquidity comparison Cash cushion Listed assets Cash and Low LTV ($m) cushion listed assets cushion Gross debt / Cash and listed assets 65% 98% 98% 127,982 137,142 2% Historically between 2% - 4% 1,2 Market value of selected listed interest
Slide 20: Financial overview
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Slide 21: Prosus Summary Financials
Prosus Summary Financials1 Revenue (combined basis) Trading loss (combined basis) ($bn) ($bn) 29% 22% 7% 15% 2.7 2.2 2.3 (0.3) (0.4) (0.5) FY' 17 3 FY' 18 FY' 19 FY' 17 3 FY' 18 FY' 19 Cash generated from operating activities (combined basis) Free cash flow (consolidated basis) ($bn) ($bn)2 61% 217%
Slide 22: FY19 financial highlights
FY19 financial highlights Healthy and growing contribution from Social and 1 Internet platforms Positive momentum in Ecommerce profit trajectory • Classifieds now profitable, including letgo 2 • Core PSP business now profitable at an operational level • Increased investment into Food Delivery ecosys
Slide 23: Social & Internet platforms: healthy contributions to growth
Social & Internet platforms: healthy contributions to growth Value of Tencent stake Value of Mail.ru stake Sale of 2% stake ($bn) ($bn) for $10bn 2,121 154,535 136,180 1,501 1,340 90,347 FY'17 FY'18 FY'19 FY'17 FY'18 FY'19 1911 2471 3421 Tencent revenue Tencent operating profit Mail.ru revenue Mail.
Slide 24: Strong momentum in Ecommerce profit trajectory
Strong momentum in Ecommerce profit trajectory Accelerating monetization - Average monthly paying listers (m) Fast revenue growth – $m1 Improving profitability - Trading loss $m1 30% 33% 47% (34%) 40% (37%) Classifieds (79%) (20%) (1%) 3.3 857 2.5 614 1.9 419 (6) (120) (330) FY'17 FY'18 FY'19 FY'17
Slide 25: Continuous improvement in FCF
Continuous improvement in FCF Incremental FCF, YoY +$201m, 50% +$81m, 40% ($m)1 1 11 95 42 (121) (31) 56 (25) 169 (16) (202) (8) (403) Cash from Investment Capex and Cash from Investment Capex and FY’17 FCF Tax paid FY’18 FCF Tax paid FY’19 FCF operations income leases operations income leases 25 1.
Slide 26: Robust balance sheet with limited leverage and comfortable headroom within credit metrics
Robust balance sheet with limited leverage and comfortable headroom within credit metrics Debt maturity profile Holding company sources of cash and commitments ($m) Undrawn as at 31 March 2019 US$m FY'17 FY'18 FY'19 Holdco sources of cash flow Group RCF1 2,500 Tencent dividend 191 247 342 Classified
Slide 27: Outlook
Outlook
Slide 28: Outlook: thoughts for the future
Outlook: thoughts for the future Drive further scale and profitability in Classifieds, Payments & Fintech and Etail Increase investment in food delivery to grow the market and our position within it Invest wisely across our chosen areas to ensure sustained long-term growth Invest further in technolo
Slide 29: Thank You
THANK YOU
Slide 30: Appendix: Just Eat offer
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Slide 31: Proposed acquisition of Just Eat for £4.9bn
Proposed acquisition of Just Eat for £4.9bn 13 £83bn >27m Markets1 TAM2 Customers3 £4.2bn 8.7x >107k Total value of Order Restaurants orders frequency3 partners3 processed2 Source: Company information 1. Just Eat Q3-19 trading update 2. Just Eat FY-18 annual report 31 3. Just Eat H1-19 results prese
Slide 32: Transaction summary
Transaction summary 1 Proposed cash offer (the ‘Offer’) for Just Eat of 710 pence per share – £4.9bn transaction value1. This represents a premium of 20% to closing price on 21 October and 12% to the undisturbed share price on 26 July 2019 2 Prosus approached the Board of Just Eat with a number of i
Slide 33: Strong transaction rationale
Strong transaction rationale Prosus believes the all-cash Offer represents compelling value for Just Eat Shareholders which is superior to the current all-stock 1 Takeaway.com offer and reflects Prosus’s perspective on the essential investments required to accelerate Just Eat’s growth strategy, stre
Slide 34: Prosus enhances value creation in food delivery
Prosus enhances value creation in food delivery Learnings and technology expertise from global Optimal combination of footprint marketplace and own delivery Ability to fully capture Prosus prioritizes growth long-term opportunities and value creation New product development Capital with a long-term
Slide 35: Funding the transaction – bridge financing terms
Funding the transaction – bridge financing terms Term: 12 months +6, +6 extension Cost: Below RCF rate, first 12 months Unsecured Prosus has secured fully committed bridge financing Rank pari passu with existing debt Take-out optionality: Bonds, bank debt and cash Prosus remain committed to retain a
Slide 36: Appendix: Additional business model material and summary financials
Appendix: Additional business model material and summary financials
Slide 37: Business model and ecosystem
Business model and ecosystem Classifieds Payments & Fintech Food Delivery At the centre of supply and demand, creating matches for A large and growing segment with global purchase volume Serving one of the most essential human needs consumers’ most important items growing from $0.8tn to $1.4tn by 20
Slide 38: Social & Internet platforms
Social & Internet platforms $125bn 31.0% $1.3bn 28.0% Attributable market cap1 stake held by Prosus Attributable market cap1 stake held by Prosus • Initial investment of $34m2 for a 47% stake in 2001 • Net investment of $267m3 • Two members on Tencent board • Three members on Mail.ru board • Sold 6%
Slide 39: Ventures & Other
Ventures & Other Everything that we are now, started small - we have done this many times Education Develop tech-enabled online learning We invest to learn and then we grow designed to democratise access to and encourage lifelong education Once we have sufficient proof-points and conviction, themes
Slide 40: Prosus Summary Financials: economic interest basis
Prosus Summary Financials: economic interest basis1 Revenue (economic interest basis) Trading profit (economic interest basis) Core headline earnings (economic interest basis) ($bn)2 ($bn)2 ($bn)2 48% (51%) 17% (30%) 52% (56%) 11% (21%) 68% 23% 18.3 3.4 15.6 3.1 3.1 2.5 10.6 2.0 1.5 FY '17 FY' 18 FY
Slide 41: Summary Statement of Financial Position
Summary Statement of Financial Position1 Combined Assets ($m) FY'17 FY'18 FY'19 Combined Equity and Liabilities ($m) FY'17 FY'18 FY'19 Goodwill and other intangible assets 3,185 3,139 2,829 Total equity 11,573 24,356 27,249 Investment in associates 10,691 16,669 19,746 Total debt 2,921 3,285 3,274 I
Slide 42: Summary Income Statement
Summary Income Statement1 ($m) FY'17 FY'18 FY'19 Revenue from contracts with customers 1,835 2,303 2,654 Cost of providing services and sale of goods (1,136) (1,384) (1,596) Selling, general and administration expenses (1,492) (1,507) (1,436) Other gains / (losses) – net (25) (27) (40) Operating los
Slide 43: Summary statement of Cash Flows
Summary statement of Cash Flows1 ($m) FY'17 FY'18 FY'19 Net cash utilised in operating activities (406) (279) (23) Net cash generated from/(utilised in) investing activities 2,905 7,846 (6,483) Net cash utilised in financing activities (242) (31) (2,121) Net movement in cash and cash equivalents 2,2
Slide 44: Simplified group structure pre and post Prosus listing
Simplified group structure pre and post Prosus listing Group structure pre Prosus listing Group structure post Prosus listing Free Float 74% MIH Holdings (Pty) Ltd 26% Parent Guarantee MIH Ming He Holdings Limited E-commerce Operations Myriad International Holdings B.V. Listed minority Controlled co
Slide 45: Glossary of terms
Glossary of terms • Al: Artificial intelligence • M&A Mergers and acquisitions • AOV Average order value • MCG MultiChoice Group • ARPIU Average rate per internet user • ML Machine learning • B2C Business to consumer • PSP Payment service provider • CAGR Cumulative average growth rate • SA South Afr
Slide 46: Glossary of financial terms
Glossary of financial terms Economic interest refers to the Group’s share of revenue or trading profit from investments in associated companies and joint ventures which are presented on a proportionately consolidated basis for segmental reporting purposes in accordance with IFRS 8, Operating Segment