Naspers Limited Class N · JSE:NPN
Naspers Limited Class N — H1 FY2006 Earnings Presentation
28 slides from Naspers Limited Class N's earnings presentation, Nov 29, 2005
Slide 1: Results Presentation: six months ended 30 September 2005
RESULTS PRESENTATION For the six months ended 30 September 2005 29 November 2005 1
Slide 2: Important information
Important information • This presentation contains forward-looking statements. While these forward-looking statements represent our judgements and future expectations, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from o
Slide 3: Agenda
Agenda 1. Highlights 2. Financial review 3. Operational review - Electronic media - Print media 4. Outlook 5. Q&A 3
Slide 4: Highlights
Highlights Operational review Financial overview h Favourable macro h Positive performance economic conditions h Revenue up 14% to R7,7 bn h Electronic media h Subscriber growth 81k h Headline earnings 366 cps h Technology investment h Core HEPS 345 cps h Print media h Free cash flow R722 m h Strong
Slide 5: Financial Review
Financial Review 5
Slide 6: Revenue analysis
Revenue analysis Sept ’05 Sept ’04 R bn R bn Total 7,7 6,7 +14% Electronic media 5,1 4,5 +13% Print media 2,6 2,2 +17% • Subscriptions comprise 54% of total revenue – grew 16% • Advertising revenues grew 20% - 15% of revenue 6
Slide 7: Earnings
Earnings Sept '05 Sept '04 R'm R'm Headline earnings 1 036 645 HEPS (cents) 366 233 Core headline earnings 976 450 CHEPS (cents) 345 163 7
Slide 8: Free cash flow
Free cash flow Sept '05 Sept '04 R'm R'm Operating cash flow 1 605 1 006 Investment income 41 - Capital expenditure (408) (242) Capital lease payments (207) (268) Tax paid (309) (326) Free cash flow 722 170 8
Slide 9: Electronic Media Operational Review
Electronic Media Operational Review 9
Slide 10: South African Pay TV
South African Pay TV h Subscriber growth – 45 000 Sept ’05 Sept ’04 Subscribers 1.2 m 1.1 m • 22 500 compact subscribers Rm Rm Revenue 2 496 2 186 h Launched PVR EBITDA 800 636 Operating profit 755 589 h Strong local productions • Regulatory 1,200,000 • Subscription regulation 1,000,000 800,000 • Op
Slide 11: Sub-Saharan Africa Pay TV
Sub-Saharan Africa Pay TV Sept ’05 Sept ’04 • Subscriber growth – 20 000 Subscribers 356 k 312 k Rm Rm • 100% of base now digital Revenue 817 714 EBITDA 301 218 • Portuguese channel: Operating profit 240 167 • 80 000 subscribers • Nigeria local productions: 400,000 • Doctor’s Quarters 350,000 • Edge
Slide 12: Greece & Cyprus Pay TV
Greece & Cyprus Pay TV Sept ’05 Sept ’04 • Subscriber growth flat Subscribers 364 k 348 k Rm Rm • Increased profitability Revenue 716 698 EBITDA 203 122 • Programming Operating profit 165 75 • 4 new sports channels • Key European soccer 400,000 350,000 300,000 • Football remains volatile 250,000 200
Slide 13: Thailand
Thailand h True offer h To buy MIH’s stake in UBC h Includes purchase of Thailand ISP h For US$160 million h UBC and True shareholders meeting: 13 December h Closing expected January 2006 13
Slide 14: Technology
Technology Sept ’05 Sept ’04 Rm Rm h Investment in R&D Revenue 220 130 EBITDA (35) (59) h Irdeto Operating profit (47) (67) • Unexpected good first half • Investing in mobile IPR development • Entriq • Technology gaining traction in the market • Building broadband content portals 14
Slide 15: Internet
Internet h South Africa Sept ’05 Sept ’04 Rm Rm • Profitable Revenue 444 422 • Tiscali integration completed EBITDA (15) 48 Operating profit (47) 20 • Migration to broadband • Sportscn • Developing business 15
Slide 16: Internet – Tencent
Internet – Tencent Sep ’05 3 months to: Sept ’05 Sept ’04 • Peak concurrent users 19.5 m RMB m RMB m • Active users 185 m Revenue 363 301 • Internet VAS 10.1 m Operating profit 117 113 • Mobile VAS 8.4 m • Overall revenue up • Mobile revenue under pressure • Internet VAS increasing • Increased devel
Slide 17: Print Media Operational Review
Print Media Operational review 17
Slide 18: Newspapers, magazines, printing
Newspapers, magazines, printing • Robust newspaper advertising • Magazine advertising slowing down Sept ’05 Sept ’04 Rm Rm Revenue 1 940 1 599 • Satisfactory circulation levels EBITDA 343 299 Operating profit 282 242 • Growth in some new titles • Exploring further investments 18
Slide 19: Newspapers, magazines printing
Newspapers, magazines printing • Newspapers • Daily Sun (more than 437 000 copies per day), Sunday Sun, Soccer Laduuma and Son continue to grow • Investment in newspaper printing capacity • Magazines • New titles performing well – weg, tuis, home, Move!, heat • Market overtraded • Magazine and other
Slide 20: Book publishing & education
Book publishing & education Sept ’05 Sept ’04 • Books Rm Rm • Moderate revenue growth Revenue 615 585 • Cyclical business EBITDA (15) 12 • Most businesses profitable Operating profit (28) (3) • Private education • Distance education doing well • Face-to-face business struggling with costs 20
Slide 21: Conclusion
Conclusion 21
Slide 22: Outlook
Outlook Snapshot Focus going forward • Core business • Maintain cost focus • Profitable • Strong cash flows • Manage regulatory change • Buoyant advertising - • Introduce black economic slowing? empowerment Growth strategy • Focus on organically growing businesses • Investigate new ventures within c
Slide 23: Q&A
Q&A 23
Slide 24: Consolidated income statement
Consolidated income statement Sept '05 Sept '04 R'm R'm Revenue 7 661 6 707 Operating profit 1 476 1 163 Finance costs ( 10) ( 135) Share of associates profits 78 32 Profit / (loss) on sale of investments 11 ( 20) Dilution profits 6 380 Profit before tax 1 561 1 420 Tax ( 433) ( 353) Net profit 1 12
Slide 25: Reconciliation “Headline” to “Core headline”
Reconciliation “Headline” to “Core headline” Sept '05 Sept '04 R'm R'm Net profit attributable to Naspers 1 066 1 008 Adjusted for: - other gains and losses ( 13) ( 3) - profit / (loss) on sale of investment ( 11) 20 - dilution profits ( 6) ( 380) Headline earnings 1 036 645 Adjusted for: - curreny
Slide 26: Appendix: Consolidated Income Statement in US Dollars convenience translated
Appendix: Consolidated Income Statement in US Dollars convenience translated Sept '05 Sept '04 R'm R'm Revenue 1 206 1 036 Operating profit 232 180 Finance costs ( 1) ( 21) Share of associates profits 12 5 Profit / (loss) on sale of investments 2 ( 3) Dilution profits 1 58 Profit before tax 246 219
Slide 27: Subscriber numbers
Subscriber numbers 30-Sep-03 31-Mar-04 30-Sep-04 31-Mar-05 30-Sep-05 Africa SA - analogue 330,414 300,821 277,238 252,525 233,860 SA - digital premium 719,838 774,887 829,283 895,346 959,129 Total S.A. 1,050,252 1,075,708 1,106,521 1,147,871 1,192,989 Sub-Saharan Africa - analogue 12,359 8,859 7,338
Slide 28: Naspers structure
Naspers structure Print media Electronic media Newspapers, Magazines & Pay TV Internet Printing Books & education South Publishers Africa Newspapers Africa & agents & Magazines Sub-Sahara Trade & Thailand Africa distribution Printing & Greece & China Distribution Private Cyprus education Thailand Te