Naspers Limited Class N · JSE:NPN
Naspers Limited Class N — H1 FY2016 Earnings Presentation
45 slides from Naspers Limited Class N's earnings presentation, November 2015
Slide 1: Financial Results Presentation
Financial Results Presentation For the six months ended 30 September 2015
Slide 2: Important information
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 i
Slide 3: Overview Financials Internet Video entertainment Outlook Appendix
Overview Financials Internet Video entertainment Outlook Appendix 3
Slide 4: 1H FY16 Overview: building platforms to optimise returns
1H FY16 Overview: building platforms to optimise returns 1 Leadership in ecommerce 2 Continue to focus on fast growing segments 3 Target high growth markets 4 Transform further into mobile 5 Optimise returns 4
Slide 5: Leadership in ecommerce
1 Leadership in ecommerce Classifieds Etail Marketplaces Classifieds leader across growth #1 ecommerce platform #1 ecommerce markets in India platform in Poland +40 countries ~50 million >50 million >260m monthly active users monthly active users registered users Monthly visits (3Q15) Mobile app ses
Slide 6: Continue focus on fast growing segments
2 Continue focus on fast growing segments Ecommerce Video entertainment Mobile commerce growing >2x average Online video consumption doubles over past US mobile services 4 years 174% 6h/week 2013 vs. 2014 YoY growth rate (%) 2x 103% 89% 89% Average = 76% 2.9h/week 74% 49% 33% 30% Lifestyle Messaging
Slide 7: Target high growth markets
3 Target high growth markets Etail PayU #1 in payments Etail Ibibo #1 in Indian travel • 2.95m transactions/month, ~2.3x size of any competitor • Operations across 16 markets • Largest online bus ticketing service, 8x size of nearest • Offering PSP services and e-wallets competitor – rolled out to S
Slide 8: Transform further into mobile
4 Transform further into mobile Strong position in India Mobile app sessions (indexed, 3Q15, India, Android) Etail Travel Classifieds 100 100 100 50 50 50 0 0 0 Flipkart Snapdeal Amazon Jabong ShopClues MakeMyTrip Goibibo Cleartrip Yatra Booking OLX Quikr Junglee Source: SimilarWeb 8
Slide 9: Optimise returns
5 Optimise returns Exiting businesses with limited opportunities * Some transactions still subject to regulatory approval 1H FY15 2H FY15 FY16 YTD* US$127m US$300m US$252m * Some transactions still subject to regulatory approval 9
Slide 10: Overview Financials Internet Video entertainment Outlook Appendix
Overview Financials Internet Video entertainment Outlook Appendix 10
Slide 11: 1H FY16: Synopsis of financials
1H FY16: Synopsis of financials Revenue* (ZARbn) Development spend* (ZARbn) Sep 14 24% 17% Sep 15 20% 8% 74.29 5.11 59.94 4.37 Trading profit* (ZARbn) Core HEPS (ZAR) 34% 40% 19% 31% Total 15.35 21.33 11.44 15.28 Organic * Based on economic interest, i.e. equity accounted investments are proportiona
Slide 12: Revenue growth remains strong
Revenue growth remains strong Incremental revenue* by segment, YoY (ZARm) 28% 9% 4% 8% 24% 10,038 1,808 5 (2,141) 4,635 74,292 59,947 Sep 14 Internet Video entertainment Print M&A Forex Sep 15 % increases = YoY organic for segment Revenue by business segment* Revenue* (ZARm) CAGR 33% 132,446 Interne
Slide 13: Development spend up 17%
Development spend up 17% Incremental development* spend by segment, YoY (ZARm) 10% 2% 7% 8% 17% 363 14 369 (11) 5,109 4,374 Sep 14 Internet Video entertainment Print Forex Sep 15 % increases = YOY organic for segment *Based on economic interest, i.e. equity accounted investments are proportionately
Slide 14: M&A activity
M&A activity Acquisition spend over time (US$m) 1H FY16 M&A by segment Avg US$445m 634 465 213 421 Other Etail (58%) Classifieds (31%) 260 New ventures (4%) Travel (1%) Payments (1%) Other Other (5%) Mar 12 Mar 13 Mar 14 Mar 15 Sep 15 14
Slide 15: Core headline earnings continue to grow
Core headline earnings continue to grow Trend in core headline earnings per share (ZAR) CAGR +15% 27.82 40% 22.16 21.81 21.33 18.50 15.28 Mar 12 Mar 13 Mar 14 Mar 15 Sep 14 Sep 15 15
Slide 16: Summarised consolidated income statement
Summarised consolidated income statement Sep 14 Sep 15 ZARm ZARm Revenue* 59,947 74,292 Less: Associates and joint ventures (25,584) (36,531) Consolidated revenue 34,363 37,761 Trading profit 2,798 2,890 Trading margin 8% 8% Net finance costs (1,208) (1,993) Share of equity accounted results 9,932 8
Slide 17: FCF benefits from lower capex and higher investment income
FCF benefits from lower capex and higher investment income Sep 14 Sep 15 ZARm ZARm Operating cash flow 2,490 3,420 Capex (1,435) (1,304) Finance leases (445) (530) Tax (2,086) (2,047) Investment income (1) 1,048 1,798 Free cash flow (FCF) (428) 1,337 (1) Dividends received from investments and equit
Slide 18: Balance sheet remains solid
Balance sheet remains solid Sep 15 ZARm Debt (1): (offshore US$3.1bn) (44,330) Cash: (South Africa ZAR4.5bn) 13,663 Closing net debt (30,667) Gearing 32% Value of marketable listed securities/Debt* 30x (1) Excludes satellite lease liabilities (R8.2bn) and non-interest bearing debt (R250m) *As at 26
Slide 19: Capital raise being considered
Capital raise being considered A • Considering an equity raise of up to US$2.5bn Size • Expected to be within existing authorities B • Fully refinance the US$1.2bn to be spent on the Avito stake increase • Provide flexibility to grow our ecommerce businesses in line with our well Rationale and Use d
Slide 20: Overview Financials Internet Video entertainment Outlook Appendix
Overview Financials Internet Video entertainment Outlook Appendix 20
Slide 21: Ecommerce: segment overview
Ecommerce: segment overview* Sep 14 Sep 15 1H FY16 Revenue split % change ZARm ZARm Revenue 12,141 15,327 26% Etail (61%) Marketplaces (13%) Trading loss (2,426) (3,769) -55% New ventures (7%) Classifieds (7%) Payments (4%) Revenue and trading losses (ZARm) Travel (3%) Other (5%) Revenue 27,772 Trad
Slide 22: Etail: revenue growth driven by scale
Etail: revenue growth driven by scale Etail: Revenue (ZARm)* 16,501 35% 39% 10,705 9,320 6,690 5,283 Mar 13 Mar 14 Mar 15 Sep 14 Sep 15 * Based on economic interest, i.e. equity accounted investments are proportionately consolidated Etail: Value creation over time (indexed)* Etail: 1H FY16 GMV by re
Slide 23: Allegro: a profitable and cash generative marketplace
: a profitable and cash generative marketplace 1H FY16 financial summary (PLNm) GMV* growth rate accelerating 11.5% 511 9.4% 218 5.0% 201 Revenue Trading profit Free cash flow Mar 14 Mar 15 Sep 15 * Exit rates for Allegro.pl only 23
Slide 24: Ecommerce: promising progress in Online to Offline (O2O)
Ecommerce: promising progress in Online to Offline (020) well-positioned across a number of segments in Latam Etail #1 in mobile food orders #1 in kids segment • ~70% market share in Brazil • >850k orders per month • Leading grossing app worldwide in kids category • >US$140m GMV run-rate • Over 160k
Slide 25: Classifieds: attractive business model, great returns at maturity
Classifieds: attractive business model, great returns at maturity Winning = large market share + healthy margins Market leaders generate substantial revenues …. at high EBITDA margins 2014 Revenues in $ millions 2014 EBITDA margins Autotrader 394 Autotrader 59% Scout24 283 Scout24 52% Finn 195 Finn
Slide 26: Classifieds: massive footprint for the OLX brand
Classifieds: massive footprint for the OLX brand Global footprint +40 Countries +20 Offices +1,000 Employees Mobile leadership Scale #1 app +4.3 +260m +19b 17 COUNTRIES (1) APP RATING MONTHLY MONTHLY ACTIVE USERS PAGE VIEWS 1) Google play store; shopping/lifestyle categories Note: numbers include OL
Slide 27: Classifieds: building momentum toward monetisation
Classifieds: building momentum toward monetisation Naspers positions (number of countries) 24 25 21 16 12 8 9 5 5 5 6 3 2 3 2 1 Entering Fighting Leading Leading and monetising 2014 1H FY15 2H FY15 1H FY16 Daily visits (m)* Daily page views (m)* 33% 62% 739 36 27 456 Sep 14 Sep 15 Sep 14 Sep 15 *Ref
Slide 28: Classifieds: gaining upper-hand in key markets
Classifieds: gaining upper-hand in key markets India Argentina App engagement App engagement OLX Quikr OLX Alamaula 1.3x 1.9x 2.3x 2.7x Apr 15 Sep 15 Apr 15 Sep 15 Source: SimilarWeb, Android active app users Source: SimilarWeb, Android active app users Brand awareness Brand awareness 4.5x 1.7x 1.4x
Slide 29: Classifieds Brazil: Cutting spending and driving growth
Classifieds Brazil : Cutting spending and driving growth Marketing spend (indexed) Daily net new listings (‘000) 56% 265 170 Q3 14 * Q3 15 Daily page views (m) 82% 35% 115 85 Q3 14 * Q3 15 Q3 14 * Q3 15 + + * Q3 14 is the combination of the two separate pre-JV entities, OLX and Bomnegocio 29
Slide 30: Solidifying classifieds leadership: Avito 67.9%
Solidifying classifieds leadership: 67.9% Leading classifieds site in Russia Rationale for investment 1 Large-scale market 2 High growth 3 Early monetisation 4 Talented management team Avito: generating strong revenue growth at attractive margins 2014 Revenues in $ millions 2014 Revenue growth YoY 2
Slide 31: Listed internet: Tencent
Listed internet: Tencent operating profit (RMBm) Revenue mix 1H FY15* Value-added services (81%) 30,542 Online advertising (15%) CAGR Other (4%) +36% 24% 19,194 19,408 * Monthly active users(m): Weixin & WeChat 15,633 15,479 39% 12,254 650 468 2011 2012 2013 2014 1H FY14 1H FY15 3Q14 3Q15 *Reflects
Slide 32: Listed internet: Mail.ru
Listed internet: Mail.ru EBITDA (RUBm) Revenue mix 1H FY15* Online advertising (35%) CAGR 18,297 Community IVAS (35%) +30% 16,122 MMO Games (22%) Other (8%) 11,535 13% 8,736 9,130 * Monthly active users (m) 8,381 31% 76 58 2011 2012 2013 2014 1H FY14 1H FY15 3Q14 3Q15 *Reflects 100% of 1H FY15 aggre
Slide 33: Overview Financials Internet Video entertainment Outlook Appendix
Overview Financials Internet Video entertainment Outlook Appendix 33
Slide 34: Scale: operations in 50 countries across Africa
Scale: operations in 50 countries across Africa Key competitive advantages 1 Leader in Africa 2 Significant expertise 3 Best content 4 Substantial scale 5 Multiple technologies Video entertainment subscriber homes (‘000) 22% CAGR 18% 2,428 873 541 2,243 151 2,355 2,019 1,686 1,499 4,699 5,174 5,563
Slide 35: Financials: navigating economic realities
Financials: navigating economic realities Video entertainment financials (ZARm) 12% 42,419 1% 36,271 30,257 25,259 8,520 8,009 22,584 7,559 20,186 6,379 5,017 4,969 Mar 12 Mar 13 Mar 14 Mar 15 Sep 14 Sep 15 Revenue Trading profit Development spend (ZARm) Programming and production costs (ZARm) Capit
Slide 36: DTH: operations strong in SA, headwinds in SSA
DTH: operations strong in SA, headwinds in SSA SA: solid performance SSA: economic headwinds SA ARPU (ZAR) SA ARPU (US$) YoY currency declines (%) SSA ARPU (US$) Nigeria Angola Zambia Kenya 29 28 39 356 -22% -18% 33 317 -38% -93% Sep 14 Sep 15 Sep 14 Sep 15 Sep 14 Sep 15 *Weighted average decline Yo
Slide 37: DTT: good growth in absence of ASOs
DTT: good growth in absence of ASOs DTT Subscribers (‘000) 2,428 2,256 817 873 541 377 151 23 Mar 12 Sep 12 Mar 13 Sep 13 Mar 14 Sep 14 Mar 15 Sep 15 Total DTT spend (ZARm) 11 1,714 798 countries 2,110 329 1,305 388 477 383 162 185 Mar 12 416 Mar 13 Mar 14 Mar 15 465 Sep 14 382 Sep 15 sites Developm
Slide 38: Positioning the business for the long-term
Positioning the business for the long-term “Anytime, Anywhere, Any device” Best quality entertainment Focus on retention Managing costs • Increasing local content further • Growing value-added services • Increasing subscription rates ‒ The Voice Angola, Glam • Driving PVR penetration • Saving on con
Slide 39: Overview Financials Internet Video entertainment Outlook Appendix
Overview Financials Internet Video entertainment Outlook Appendix 39
Slide 40: Vision going forward: building platforms to optimise returns
Vision going forward: building platforms to optimise returns 1 Leadership in ecommerce 2 Continue to focus on fast growing segments 3 Target high growth markets 4 Transform further into mobile 5 Optimise returns 40
Slide 41: Overview Financials Internet Video entertainment Outlook Appendix
Overview Financials Internet Video entertainment Outlook Appendix 41
Slide 42: Group structure
Group structure *Organogram depicts major brands 42
Slide 43: Ecommerce: expansive global footprint
Ecommerce: expansive global footprint * Only includes country of domicile for associates, not their entire footprint 43
Slide 44: Glossary of terms
Glossary of terms ARPU: Average Revenue Per User IVAS: Internet Value-Added Service ASO: Analogue Switch Offs M&A: Mergers and Acquisitions B2C: Business to Consumer MAU: Monthly Active Users C2C: Consumer to Consumer MMO: Massively Multiplayer Online CAGR: Cumulative Annual Growth Rate OCS: Online
Slide 45: Investor Relations
Investor Relations Meloy Horn Office: +27 11 289 3320 Mobile: +27 82 7727 123 E-mail: InvestorRelations@naspers.com Website: www.naspers.com 45 45