45 slides from Prosus N.v. Class N's earnings presentation, 2020
Slide 1: Detailed Financials
Detailed Financials For the year ended 31 March 2020
Slide 2: Important information
Important information This report contains forward-looking statements as defined in the United States Private Securities Litigation Reform Act of 1995 concerning our financial condition, results of operations and businesses. These forward-looking statements are subject to a number of risks and uncer
Slide 3: Operations
Drosus Operations
Slide 4: Core Classifieds: Creating a profitable, sustainable portfolio of assets
Core Classifieds: Creating a profitable, sustainable portfolio of assets OLX Group: Average revenue/internet user Core classifieds: (ARPIU)2,3 monetisation countries (US$) • OLX continues to create a profitable, sustainable portfolio of businesses. 4% OLX is the largest classifieds player globally •
Slide 5: Core Classifieds: Our key markets delivered attractive economics
Core Classifieds: Our key markets delivered attractive economics Avito: • Avito grew strongly and delivered a 51% trading profit margin. Avito continues to Poland Brazil invest in new products to further deepen its ecosystem and improve user experience eg. Avito Pay & Ship. # paying listers +25% YoY
Slide 6: Classifieds: Creating value by moving deeper into the transaction
Classifieds: Creating value by moving deeper into the transaction Vehicles transacted (‘000)1: Transactions (Tx): • The model enhances the user experience 162% and has been particularly successful in autos. Vehicle inspection and immediate sale provide increased convenience and peace of mind for bot
Slide 7: Sustained leadership in Food Delivery
Sustained leadership in Food Delivery Annualised orders (m)1 • Prosus has invested ~US$3bn into food Leadership positions in 38 of our markets delivery. The current analyst consensus 102% valuation implies an attractive IRR. • Covid-19 is accelerating structural changes in food and further increasin
Slide 8: iFood retaining and attracting new customers
iFood retaining and attracting new customers • iFood continues its rapid expansion, growing orders +100%, underlining the ability to both retain existing consumers Orders (m)1 and attract new consumers. 103% • iFood has more than doubled its restaurant coverage to over 160k. iFood increased food opt
Slide 9: Food Delivery associates: Positive momentum in unit economics
Food Delivery associates: Positive momentum in unit economics • Delivery Hero (DH) continues it strong growth trajectory, as it invests in expansion into other geographies, own- delivery, customer acquisition and new A leader in 36 of 42 markets A leader in India verticals such as convenience. • DH
Slide 10: Payments & Fintech: Strong growth in core Payments
Payments & Fintech: Strong growth in core Payments • India is PayU’s largest market accounting 20 High growth markets YTD Number of Transaction (bn)1 for 51% of TPV. PayU is well placed to benefit from the migration of consumer 30% activity online and the shift from cash to digital payments as our p
Slide 11: Etail: eMAG continued solid top-line growth with margin improvement
Etail: eMAG continued solid top-line growth with margin improvement • eMAG accelerated revenue growth to 16% YoY. The business also reduced GMV (US$m)1 trading losses by half. Gross margins increased through leveraging fixed costs and other actions. 12% (18%) • eMAG continued to outpace the market w
Slide 12: Ventures: We invest to learn and then we grow
Ventures: We invest to learn and then we grow • The Group invests in sectors of the economy where disruptive technology can lead to meaningful change in consumer behavior and economics. Education Health • The Group has invested ~US$850m in total in education, health, mobility & logistics, social com
Slide 13: M&A
Drosus M&A
Slide 14: M&A focused on core segments
M&A focused on core segments • Prosus invested US$1,339m in Investment to scale our core segments in FY20 FY20. Significant investments included: ⁻ Frontier Car Group (US$320m) ⁻ Iyzico (US$199m) ⁻ PaySense (US$163m) ⁻ Swiggy (US$100m) $1.3bn ⁻ Meesho (US$81m) ⁻ Wibmo (US$66m) ⁻ Reddot (US$45m) ⁻ El
Slide 15: Investment to strengthen our leadership positions
Investment to strengthen our leadership positions Investment to over Investments scale the ourlast corethree segments years Leaders in local market consolidation Acquisitions/Investments (US$m)1 In FY20: M&A after FY20: 3 057 2 222 Brazil 1 339 FY18 FY19 FY20 14
Slide 16: Financials
Drosus Financials
Slide 17: Summary financials
Summary financials1 Revenue (US$bn)2,3 Trading profit (US$bn)2,3 17% (23%) 12% (16%) 21.5 3.8 3.4 18.3 FY19 FY20 FY19 FY20 Core headline earnings (US$bn)3 Free cash flow (US$m) 9% (13%) ( 102) ( 338) 3.4 3.1 FY19 FY20 FY19 FY20 1 Summary financials from continuing operations. 2 Results reported on a
Slide 18: Strong revenue growth with acceleration in 2H
Strong revenue growth with acceleration in 2H • Ecommerce revenue increased 33% YoY, representing a 7-percentage point Ecommerce revenue growth by core segments (%)1 H1 vs H21 acceleration compared to last year. H1 H2 • Growth was driven by meaningful contributions across the portfolio 105% 28% tota
Slide 19: Core Classifieds driving profitability while investing in Transactions
Core Classifieds driving profitability while investing in Transactions Revenue (US$’m)1 Trading profit/(loss) (US$’m)1 Investment in Transactions 49% (37%) • Core classifieds continued trend of healthy growth with improved 1,281 profitability. Transactions contributed 31% of revenues, up from 12% in
Slide 20: Food Delivery: Strong growth, positive customer acquisition trends and investment in 1P drive margin improvement in 2H
Food Delivery: Strong growth, positive customer acquisition trends and investment in 1P drive margin improvement in 2H Revenue (US$m)1 Trading loss (US$m)1 99% (105%) • Investing to transform all aspects of the supply chain from how food is sourced, to how it is prepared and ultimately consumed. 751
Slide 21: Core Payments profitable as the business continues to scale
Core Payments profitable as the business continues to scale Revenue (US$m)1 Trading profit/(loss) (US$m)1 19% (21%) Core Payments New initiatives & central costs 428 360 67 • Solid 21% YoY top-line growth driven by increased growth in transactions volume and value. 46 • Profitability in core PSP imp
Slide 22: Etail: Strong organic growth and improved profitability
Etail: Strong organic growth and improved profitability Revenue (US$m)1 Trading loss (US$m)1 M&A / Divestitures 1 838 1 529 -11% (16%) 1 363 • Revenue adjusted for the disposal of Flipkart in August 2018 continues to grow healthily. Trading loss reduced as eMAG leverages additional scale to generate
Slide 23: Ecommerce “Other”
Ecommerce “Other” Prosus Ventures: Revenue (US$m)1 Trading loss (US$m)1 • Many of the Group’s early stage businesses are already monetising. Revenue from Prosus Ventures increased 161% YoY (44% YoY in local currency excluding M&A). 24% (23%) Ecommerce “Other” includes: Corporate costs 297 • Prosus V
Slide 24: Social & internet platforms continue to outperform
Social & internet platforms continue to outperform Tencent • Tencent grew revenue 21% YoY for their year ended 2019 driven by growth in Tencent revenue (RMBm)1 Mail.ru revenue (RUBm)2 payments, social & other advertising 21% 23% and digital content sales. • On a non-GAAP basis, operating profit1 377
Slide 25: Segmental detail
Segmental detail1 Revenue EBITDA2 Trading profit FY19 FY20 FY19 FY20 FY19 FY20 Ecommerce 3 596 4 266 (519) (789) (575) (918) - Classifieds 857 1 281 10 82 (6) 34 - Payments & Fintech 360 428 (39) (60) (43) (67) - Food delivery 377 751 (162) (596) (171) (624) - Etail 1 529 1 363 (87) 8 (101) (20) - T
Slide 26: Development spend increased due to investment in Food Delivery
Development spend increased due to investment in Food Delivery Consolidated development spend (US$m)1 Economic interest development spend (US$m)1 • The Group ramped up development spend in Food Delivery in FY20. 28% (37%) 48% (57%) • Consolidated development spend of US$566m increased 37% due to inc
Slide 27: Profitable businesses contributed significantly to central cash flows
Profitable businesses contributed significantly to central cash flows Consolidated trading profit from profitable Sources of free cash inflow (US$m)2,3 • Improved Ecommerce profitability, ecommerce businesses (US$m)1,2 across the Classifieds, Payments & Fintech and Etail resulted in greater 11% cont
Slide 28: FCF reflects increased Food Delivery investment and transactions costs
FCF reflects increased Food Delivery investment and transactions costs US$m FY19 FY20 • Working capital was impacted by: EBITDA (265) (324) ⁻ Negative timing effects related to Non-cash items 119 106 merchant cash movements from the Food Delivery businesses. Working capital (including merchant cash,
Slide 29: Prosus company sources of cash and commitments
Prosus company sources of cash and commitments • Dividends and cash extractions US$m FY19 FY20 Dividends to HoldCo (US$m) from our associates and subsidiaries increased by 18%. Cash remitted to/generated at Holdco level: • Classifieds is profitable and paid a dividend to the HoldCo of Tencent divide
Slide 30: Significant financial flexibility to fund our growth strategy
Significant financial flexibility to fund our growth strategy Debt maturity profile (US$bn) Revolving credit facility (RCF) • The US$2.5bn RCF facility was undrawn at 31 March 2020. The Group exercised its option to extend the maturity date to 2025. All lenders in the facility agreed to extend their
Slide 31: Summarised income statement
Summarised income statement • Operating losses increased mainly due US$m FY19 FY20 to increased investment in Food Delivery. Continuing operations: • Net finance costs and share of equity- Revenue1 18 340 21 455 accounted results (page 31 & 32) Less: Equity-accounted investments (15 685) (18 125) •
Slide 32: Finance costs
Finance costs Interest paid and received: US$m FY19 FY20 • Interest received decreased due to lower cash and short-term cash investment balances as the Group deployed capital to grow its core Interest income 265 201 segments. Loans and bank accounts 265 201 • The adoption of IFRS16 Leases increased
Slide 33: Share of equity-accounted results
Share of equity-accounted results • An increase of US$521m representing 15% YoY increase in share of equity- FY20 (US$m) FY19 FY20 accounted results relates mainly to: − Increased Tencent profits, Tencent1 3 696 4 178 − Increased profits from Mail.ru, which include a gain on joint venture Mail.ru1 (
Slide 34: Core headline earnings drivers
Core headline earnings drivers • Core headline earnings (which excludes Incremental core headline earnings drivers, YoY (US$m)1 once-off and non-operating items such as amortisation of intangible assets recognised in business combinations, etc.), is not defined under IFRS, but is 9% (13%) aimed at p
Slide 35: Core headline earnings reconciliation
Core headline earnings reconciliation • Fair-value adjustments and currency translation differences were impacted US$m FY19 FY20 by (amongst other items) gains on financial instruments of US$439m recorded by Tencent, the re- measurement of written put options, Headline earnings from continuing opera
Slide 36: Contribution by associates and joint ventures
Contribution by associates and joint ventures Company PPA IFRS Other Core HE • Equity-accounted results include the FY20 (US$m) Group’s share of the earnings of its results adjustments results adjustments Contribution associates and JV’s. Tencent1 4 178 - 4 178 (4) 4 174 • In arriving at core headli
Slide 37: Tencent’s contribution to core headline earnings
Tencent’s contribution to core headline earnings FY19 FY20 Tencent: Dec 18 Prosus’ share Tencent: Dec 19 Prosus’ share (RMBm)1 (US$m) (RMBm)1 (US$m) Tencent profit attributable to equity holders 78 719 3 655 93 310 4 162 Adjustments to core: (1 203) (68) 1 041 12 - Impairment of investments 17 238 7
Slide 38: Current assets and liabilities
Current assets and liabilities • Total long-term and short-term written Current assets (US$m) FY19 FY20 Current liabilities (US$m) FY19 FY20 put option liabilities totaled US$896m (FY19: US$827m). Inventory 148 213 Current portion of long-term debt 22 63 • Outstanding put options relate to amongst o
Slide 39: Changes to SBC - FY21
Drosus Changes to SBC - FY21
Slide 40: Effective 1 April 2020, the Group will treat all SARs as cash settled
Effective 1 April 2020, the Group will treat all SARs as cash settled The rationale for the change The change does not impact cash • Two listed shares complicates the settlement process Settle in shares Settle in cash • For simplicity and transparency the Group has revisited the accounting for share
Slide 41: Explanation for the different accounting treatment of SARs
Explanation for the different accounting treatment of SARs Increase / decrease Increasein SBC as awards in SBC cost are for revalued the groupat every The accounting impact of settlement in cash vs shares reporting period FY20 SBC (included in TP) under respective settlements (US$m)1 Settle in share
Slide 42: Appendix
Drosus Appendix
Slide 43: Group portfolio
Group portfolio Ecommerce Social & internet platforms 31% Classifieds Payments & Fintech Food delivery Etail Ventures 28% 100%1 99% 82% 80% 24% 100% 99% 55%2 42% 15% 100%3 72% 21% 21% 80%4 89% 40% 44% 84% 99% 11% 79% 16% 19% 12% 21% 21% 20% Organogram depicts effective percentage holdings in major e
Slide 44: Glossary
Glossary AI: Artificial intelligence KPI: Key performance indicator ARPIU: Total revenue for OLX Core Classifieds monetisation countries, M&A: Mergers and acquisitions divided by the total number of internet users in those countries ML: Machine learning CODM: Chief operating decision mak
Slide 45: If you require any further information, please visit our website
If you require any further information, please visit our website www.prosus.com or alternatively email Eoin Ryan (Head of Investor Relations) at InvestorRelations@prosus.com