Prosus N.v. Class N · EURONEXT:PRX
Prosus N.v. Class N — H1 FY2020 Earnings Presentation
39 slides from Prosus N.v. Class N's earnings presentation, November 2019
Slide 1: Detailed Financials
Detailed Financials For the six months ended 30 September 2019
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. Words such as “believe”, “anticipate”, “intend”, “seek”, “will”, “plan”, “could”, “may”, “endeavor” and similar expressions are intended to identify
Slide 3: Operations
Drosus Operations
Slide 4: Classifieds: Improving monetisation and expanding our presence in convenient transactions
Classifieds: Improving monetisation and expanding our presence in convenient transactions OLX Group: Average revenue/internet user (ARPIU)1: • Strong leadership positions enabling monetisation countries (US$) improved monetisation of paying lister base and higher ARPIUs. 7% • Convenient transaction
Slide 5: Classifieds: Focus on key markets – Avito and Poland
Classifieds: Focus on key markets – Avito and Poland Avito: • Avito in Russia continued its good momentum, with categories of autos and .pl real estate performing particularly well. Avito increased revenue by 21% YoY to RUB12.5bn, at a 57% trading profit # paying listers +25% YoY # paying listers +1
Slide 6: Classifieds: Focus on key markets – Brazil, letgo and Ctx
Classifieds: Focus on key markets – Brazil, letgo and Ctx OLX Brazil: Financials (US$m)2 • Underlying momentum remains strong 1H FY19 despite macro economic challenges. OLX 1H FY20 Brazil grew revenue 25% in local currency Brazil 75% on the back of a strong performance in its cars and real estate ve
Slide 7: Payments & Fintech: connecting consumers and merchants and leveraging data to build new services
Payments & Fintech: connecting consumers and merchants and leveraging data to build new services Global footprint – operations in 20 markets • PayU processed almost US$18bn in Average daily transactions (m)1 payment value in 1HFY20, across its markets. 35% • India remains the largest market and acco
Slide 8: Creating a global Food Delivery leader
Creating a global Food Delivery leader Global footprint: Annualised orders (m)1 • The food-delivery sector is still in its early Leadership position in 36 of our markets stages, and represents a large, 110% underpenetrated and growing market. • Prosus has invested ~US$2.8bn in food since FY16. Curre
Slide 9: iFood investing to scale the opportunity
iFood investing to scale the opportunity • iFood is the clear leader in Brazil in terms Orders (m)1 of scale and customer satisfaction. 122% • iFood posted solid revenue growth of 78% in local currency to US$132m. • iFood is investing in 1P models and logistics and extending to new cities. The busin
Slide 10: Strong growth driven by innovation and city expansion
Strong growth driven by innovation and city expansion • Strong acceleration from Delivery Hero (DH), which is growing its market size, increasing order frequency and improving customer selection with a diversified A leader in 34 of 41 markets A leader in India restaurant portfolio now extending to a
Slide 11: Etail: Solid growth and improving economics
Etail: Solid growth and improving economics • eMAG, continued to outpace the market GMV (US$m)1 across its footprint with GMV growing 17%. 10% (17%) • In Romania, gross merchandise value was up 15% organically YoY, with particularly strong performance across the third-party (3P) marketplace, which g
Slide 12: Financials
Drosus Financials
Slide 13: Summary financials
Summary financials1 Revenue (US$bn)2,3 Trading profit (US$bn)2,3 12% (20%) 5% (7%) 9.9 1.9 8.9 1.8 1H FY19 1H FY20 1H FY19 1H FY20 Core headline earnings (US$bn)3 Free cash flow (US$m) 7% (11%) 1.7 85% 1.6 96 14 1H FY19 1H FY20 1H FY10 1H FY20 1 Summary financials from continuing operations. 2 Resul
Slide 14: Strong revenue growth with acceleration in Q2
Strong revenue growth with acceleration in Q2 • Ecommerce revenue grew strongly, up Ecommerce revenue growth by core segments (%)1 Q2 vs Q12 28% YoY. Q1 Q2 • Revenue growth in Ecommerce was driven by meaningful contributions across the 23% portfolio totaling US$1.9bn. 69% Ecommerce 32% • Ecommerce g
Slide 15: Core Classifieds driving profitability, investing in Ctx and tech backbone
Core Classifieds driving profitability, investing in Ctx and tech backbone Revenue (US$m)1 Trading profit/(loss) (US$m)1 Ctx Investment in Ctx Core Classifieds driving improved profitability even while investing to build out a global technology backbone and in convenient transactions to build deeper
Slide 16: Core Payments profitable, investing in expansion initiatives and credit
Core Payments profitable, investing in expansion initiatives and credit Revenue (US$m)1 Trading (loss)/profit (US$m)1 Core PSP, excluding new initiatives 360 Core profitability reinvested to scale and strengthen credit 294 offering in India and for geographical expansion initiatives 16% (20%) 199 17
Slide 17: Strategic investment across Food portfolio driving accelerated growth
Strategic investment across Food portfolio driving accelerated growth Revenue (US$m)1 Trading loss (US$m)1 Food Delivery has evolved beyond simply connecting restaurants and customers. We are investing to transform all aspects of the supply chain from how food is sourced, to how it is prepared and u
Slide 18: Etail: focused on profitable growth
Etail: focused on profitable growth Revenue (US$m)1 Trading loss (US$m)1 1 838 Revenue adjusted for the disposal of Flipkart in August 2018 continues to grow 1 529 healthily. Trading loss reduced as eMAG leverages additional scale to generate efficiencies, supported by improved cost control. 849 -38
Slide 19: Ecommerce “Other”
Ecommerce “Other” • Prosus Ventures invests in early stage Revenue (US$m) 1H FY19 1H FY20 Trading loss (US$m) 1H FY19 1H FY20 businesses that have potential to disrupt large markets. Other ecommerce 106 145 Ecommerce other and corporate (95) (96) • We have invested in education, health, mobility and
Slide 20: Social & internet platforms: Healthy contributions to earnings growth
Social & internet platforms: Healthy contributions to earnings growth Tencent • Tencent grew revenue 19% YoY to Tencent revenue (RMBm)1 Mail.ru revenue (RUBm)2 RMB272bn in the first nine months of 2019, driven by growth in Fintech, cloud 19% 23% related services, digital-content 312 694 75 260 subsc
Slide 21: Segmental detail
Segmental detail Revenue EBITDA Trading profit 1H FY19 1H FY20 1H FY19 1H FY20 1H FY19 1H FY20 Ecommerce 1 840 1 908 (193) (355) (220) (416) - Classifieds 396 587 50 59 42 37 - Payments & Fintech 171 199 (22) (35) (24) (38) - Food delivery 181 306 (39) (273) (41) (283) - Etail 849 525 (74) (1) (83)
Slide 22: Development spend increased due to Food Delivery
Development spend increased due to Food Delivery Consolidated development spend (US$m)1 Economic interest development spend (US$m)1 • The group ramped up development spend in Food Delivery in 1H FY20. 55% (76%) • Consolidated development spend of 57% (65%) US$262m increased 65% due to increased spen
Slide 23: Profitable businesses contributed significantly to central cash flows
Profitable businesses contributed significantly to central cash flows Consolidated trading profit from profitable Sources of free cash inflow (US$m)2,3 • Improved Ecommerce profitability, ecommerce businesses (US$m)1,2 particularly in Classifieds, resulted in a greater contribution to overall centra
Slide 24: FCF reflects increased Food Delivery investment and transactions costs
FCF reflects increased Food Delivery investment and transactions costs US$m 1H FY19 1H FY20 • The group reported positive free cash flow EBITDA (58) (132) of US$14m at 1H FY20. Non-cash items (94) (67) • Excluding transaction costs incurred, Working capital 9 (56) primarily for the listing of Prosus
Slide 25: Prosus company sources of cash and commitments
Prosus company sources of cash and commitments US$m 1H FY19 1H FY20 • Inflows increased by 10%. Cash remitted to/generated at Holdco level: • Interest income has been included in our analysis as it is now quite Tencent dividend 332 377 meaningful for the group given our Classifieds portfolio 81 108
Slide 26: Strategic acquisitions and consolidation to drive future growth
Strategic acquisitions and consolidation to drive future growth 1H FY20 1H FY20 Consolidation M&A after Sep191 acquisitions/investments • Prosus invested US$374m in 1H F20. Significant investments include: Announced: - Meesho (US$80m) - Wibmo (US$66m) - Reddot (US$45m) - Brainly (US$25m) - OLX minor
Slide 27: Summarised income statement
Summarised income statement US$m 1H FY19 1H FY20 • Increase of US$169m in share of equity accounted investments relates to: Continuing operations: Revenue1 8 881 9 925 − Increased Tencent profits; Less: Equity-accounted investments (7 670) (8 508) − Increased profits from Delivery Hero Consolidated
Slide 28: Finance costs before remeasurements flat YoY
Finance costs before remeasurements flat YoY US$m 1H FY19 1H FY20 Remeasurement of written put option liabilities • Gain for the period arises from foreign Interest income 128 118 exchange impacts and changes in Loans and bank accounts 128 118 valuations. In 1H FY19 a gain of US$239m was recognised
Slide 29: Contribution by associates and joint ventures
Contribution by associates and joint ventures Company PPA IFRS Other Core HE 1H FY20 (US$m) • Equity-accounted results include, amongst results adjustments results adjustments Contribution others, the group’s share of the earnings Tencent1 2 237 - 2 237 (249) 1 988 of Tencent, Mail.ru, MakeMyTrip, D
Slide 30: Core headline earnings
Core headline earnings • Core headline earnings (which excludes Incremental core headline earnings drivers, YoY (US$m)1 once-off and non-operating items such as amortisation of intangible assets recognised in business combinations, etc.), is not defined under IFRS, but is aimed at 7% (10%) providing
Slide 31: Core headline earnings reconciliation
Core headline earnings reconciliation • Fair-value adjustments and currency US$m 1H FY19 1H FY20 translation differences were impacted by (amongst other items) gains on financial instruments of US$431m recorded by Headline earnings from continuing operations 2 820 1 614 Tencent, the re-measurement o
Slide 32: Tencent’s contribution to core headline earnings
Tencent’s contribution to core headline earnings 1H FY19 1H FY20 Tencent: June 18 Prosus’ share Tencent: June 19 Prosus’ share (RMBm)1 (US$m) (RMBm)1 (US$m) Tencent profit attributable to equity holders 41 157 1 944 51 346 2 304 Adjustments to core: (3 128) (169) (6 891) (316) - Impairment of invest
Slide 33: Strong balance sheet provides flexibility to pursue growth ambitions
Strong balance sheet provides flexibility to pursue growth ambitions • The group had a strong net cash position US$m FY19 1H FY20 of US$5.4bn. Debt1: (3 247) (3 247) • Prosus will invest in opportunities at the Cash2: 9 160 8 672 right price, aligned with the strategy to deliver attractive returns t
Slide 34: Strong balance sheet provides flexibility to pursue growth ambitions
Strong balance sheet provides flexibility to pursue growth ambitions Debt maturity profile (US$m) Debt • US$1bn 7yr bond issued July 2013 (6% coupon). • US$1.2bn 10yr bond issued July 2015 Group RCF (5.5% coupon). US$2 500m • US$1bn 10yr bond issued July 2017 Bond Bond Bond (4.85% coupon). US$1 000m
Slide 35: Current assets and liabilities
Current assets and liabilities • Total long-term and short-term written 1H 1H put option liabilities totaled US$817m Current assets (US$m) FY19 Current liabilities (US$m) FY19 FY20 FY20 (FY19: US$827m). Inventory 148 142 Current portion of long-term debt 22 1 062 • Outstanding put options relate to
Slide 36: Appendix
Drosus Appendix
Slide 37: Group Portfolio
Group Portfolio 74% Local SA assets 96% 85% Ecommerce Social & internet platforms Classifieds Payments & Fintech Food delivery Travel Etail Ventures 31% 81% 5% 80% 24% 28% 100%1 99% 100% 22% 55%3 13% 100% 21% 22% 21% 80%2 21% 39% 44% 36% 99% 12% 12% 99% 17% 72% 12% 1 OLX owns 50% of operations in Br
Slide 38: Glossary
Glossary AI: Artificial intelligence JSE: Johannesburg Stock Exchange Ctx: Convenient transactions M&A: Mergers and acquisitions COD: Cash-on-delivery ML: Machine learning EBITDA: Earnings before interest tax, depreciation & PSP: Payment service provider amortisation SA: South Afri
Slide 39: 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