Naspers Limited Class N · JSE:NPN
Naspers Limited Class N — FY2006 Earnings Presentation
27 slides from Naspers Limited Class N's earnings presentation, Jun 27, 2006
Slide 1: Results presentation
Results presentation For the financial year ended 31 March 2006 27th June 2006 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 ● Highlights ● Financial overview ● Operational overview • Electronic media • Print media ● Outlook ● Q&A 3
Slide 4: Highlights
Highlights Operational overview Financial overview ● Favourable macro economic conditions ● Revenue growth – 16% ● Pay TV subscriber growth 163 000 ● Core headline earnings growth – 67% ● Launched new titles ● Free cash flow R1,9bn Investment / R&D focus M&A activity ● Investment focus – BRICSA ● 30
Slide 5: Financial overview
Financial overview 5
Slide 6: Revenue analysis
Revenue analysis March ‘06 March ‘05 R bn R bn Total 15,7 13,5 +16% Electronic media 10,2 8,7 +17% Print media 5,5 4,8 +15% ● Pay TV subscribers: 163 000 net growth ● Advertising revenue: 22% growth 6
Slide 7: Operating margins
Operating margins March ‘06 March ‘05 Revenue R15,7bn R13,5bn +16% Operating profit before 3,1bn 2,5bn +22% amortisation, other gains/losses Operating margin 19.7% 18.8% ● Scale effect – pay television ● Margin improvement despite increased R&D: Internet and Entriq 7
Slide 8: Core headline earnings
Core headline earnings March ‘06 March ‘05 Headline earnings R2 146m R2 024m +6% Adjusted for: Deferred tax assets (42) (470) Amortisation: intangible assets 48 40 IAS39 fair value adjustments (145) (360) Profit: discontinued operations (32) (49) Core headline earnings 1 975m 1 185m +67% 8
Slide 9: Free cash flow
Free cash flow March ‘06 March ‘05 R bn R bn Operating cash flow 3 912 3 051 Investment income 47 6 Capital expenditure (870) (613) Capital lease payments (406) (508) Tax paid (822) (474) Free cash flow 1 861 1 462 9
Slide 10: Electronic media
Electronic media 10
Slide 11: South African pay TV
South African pay TV Mar ‘06 Mar ‘05 ● Subscribers Subscribers 1 251k 1 148k Rm Rm • 83% digital Revenue 5 219 4 377 • growth 103 000 EBITDA 1 693 1 300 EBITA 1595 1 214 • compact bouquet growth 42 000 ● PVR launched 1,600 • 28 000 units 1,200 Thousands ● Innovative programming 800 ● Satellite broad
Slide 12: Sub-Saharan Africa pay TV
Sub-Saharan Africa pay TV Mar ‘06 Mar ‘05 ● Subscribers Subscribers 385 335 Rm Rm • 100% digital Revenue 1 738 1 473 EBITDA 595 526 • growth 50 000 EBITA 473 414 ● Portuguese service 500 • Good growth 400 Thousands 300 • Up to 84 000 subscribers 200 ● Nigeria – local programming 100 ● Continued regu
Slide 13: Greece and Cyprus pay TV
Greece and Cyprus pay TV Mar ‘06 Mar ‘05 ● Subscribers Subscribers 374 364 Rm Rm • 69% digital Revenue 1 460 1 433 EBITDA 374 254 • growth 10 000 EBITA 294 169 ● 10 new channels ● Football costs 500 400 Thousands ● Increased stake 300 200 100 0 2001 2002 2003 2004 2005 2006 Analogue Digital 13
Slide 14: Conditional Access
Conditional Access Mar ‘06 Mar ‘05 ● Irdeto shipped 6 million devices Rm Rm Revenue 352 255 ● Acquired Philips Cryptoworks EBITDA 19 (35) EBITA 5 (47) ● 300 customers ● 60 countries ● First mobile TV service launched 14
Slide 15: Entriq
Entriq Mar ‘06 Mar ‘05 ● Gained traction Rm Rm Revenue 66 34 ● Major clients include: EBITDA (153) (85) • NBC, Viacom, MTV, Prosieben EBITA (165) (89) ● Developed MediaZone • Building web portals with niche content ● R&D investment expected to continue 15
Slide 16: Internet
Internet Mar ‘06 Mar ‘05 ● South Africa Rm Rm Revenue 898 696 • 344 000 subscribers EBITDA (34) 11 EBITA (98) (52) • Remains profitable Equity share of Tencent 150 84 • Commercezone – 3rd party clients net profit ● Thailand • Internet portal development 16
Slide 17: Internet - Tencent
Internet - Tencent ● Leading Chinese instant-messaging platform ● #1 casual games portal ● Peak concurrent users 19.6m ● Launched new services ● Diversified business models and revenue streams 17
Slide 18: Print media
Print media 18
Slide 19: Newspapers, magazines, printing (1)
Newspapers, magazines, printing (1) ● Continued robust economic Mar ’06 Mar ‘05 Rm Rm conditions Revenue 3 983 3 374 EBITDA 745 665 ● Strong organic growth EBITA 616 550 ● Good advertising support ● New printing plant commissioned – Paarl Web Gauteng ● Acquisitions: • 30% stake in major #1 magazine
Slide 20: Newspapers, magazines, printing (2)
Newspapers, magazines, printing (2) ● Newspapers • Daily Sun biggest local daily - circulation some 440 000 & readership 3,2 million • Son and Soccer Laduuma continue to grow • Additional printing presses ● Magazines • Launched new titles – Real Simple, Your Child, Shop!, Men’s Health Living ● Inter
Slide 21: Book publishing and education
Book publishing and education Mar ’06 Mar ‘05 Rm Rm ● Book publishers Revenue 1 517 1 408 EBITDA 66 114 • Excellent school books performance EBITA 36 86 ● Sold Computicket ● Private education – mixed performance • Distance education had a satisfactory year • Face to face continued with repositioning
Slide 22: Outlook
Outlook 22
Slide 23: BEE
BEE ● Codes of Good Practice should be finalised soon ● SA operations ensuring compliance ● Broad based BEE offerings: • MultiChoice South Africa • Media24 ● Hope to announce shortly 23
Slide 24: Outlook
Outlook Snapshot Focus going forward ● Favourable economic ● Increased R&D conditions • Broadband ● Core businesses • Mobile • Profitable • Strong cash flows ● Explore potential investments ● BRICSA countries focus ● Pressure on bottom line 24
Slide 25: Q&A
Q&A 25
Slide 26: Consolidated income statement
Consolidated income statement Financial year ended: Mar '06 Mar '05 Mar '06 Mar '05 Rm Rm US$ m US$ m Revenue 15 706 13 518 2 554 2 176 Operating profit 3,004 2,469 489 398 Net finance costs (11) (216) ( 2) ( 35) Share of equity-accounted results 151 88 25 14 Profit / (loss) on sale of investments,
Slide 27: Subscriber numbers
Subscriber numbers 31-Mar-04 31-Mar-05 31-Mar-06 Africa SA - analogue 300,821 252,525 217,440 SA - digital 774,887 895,346 1,033,093 Total S.A. 1,075,708 1,147,871 1,250,533 Sub-Saharan Africa - analogue 8,859 2,373 819 Sub-Saharan Africa - digital 283,093 333,781 384,216 Total Sub-Saharan Africa 29