Slide 1: Financial results presentation
Financial results presentation For the six months ended 30 September 2018
Slide 2: Important information
2 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 identi
Slide 3: Agenda
3 Agenda Strategic business review 01 Financial review 02 VE / MultiChoice Group (MCG) 03 Outlook 04
Slide 4: Strategic business review
STRATEGIC BUSINESS REVIEW NASPERS
Slide 5: Investing in high-growth markets continues to create tremendous value
5 Investing in high-growth markets continues to create tremendous value Investing in platforms in high-growth markets Focus on three core ecommerce segments Partner with 40 Countries1 +340m MAU’s entrepreneurs Classifieds Optimise Invest Build Leader in 40 markets Sustainable businesses leadership w
Slide 6: 1H FY19 highlights
6 1H FY19 highlights Revenue up 23% (29%) YoY to US$11.0bn Solid financial performance Trading profit up 22% (34%) to US$2.0bn Core headline earnings up 39% to US$3.85 per N ordinary share Classifieds: strong growth trajectory, now profitable including letgo Strong execution in ecommerce Payments: T
Slide 7: Classifieds: global leader strongly positioned in high-growth markets
7 Classifieds: global leader strongly positioned in high-growth markets Platform activity growing rapidly Outperforming peers Profitable in 1H FY19 Average monthly paying listers (m)1 Revenue growth rates vs peers (reported currency)2 Trading profit/(loss) (US$m)3 33% 47 2.6x (45) PSP +Credit (114)
Slide 8: Classifieds: deepening market presence through convenient transactions
8 Classifieds: deepening market presence through convenient transactions Extending the business model Convenience drives growth Convenient transactions Improves user and agent experience Enhances price transparency, convenience, Dedicated car and trust and safety. real-estate verticals Verticalised
Slide 9: Food delivery: extending lead through investment in high-growth markets
9 Food delivery: extending lead through investment in high-growth markets Disrupting food service Global leader Investing for growth Market leader in Latin America Sizeable food opportunity Orders (m)2 Global consumer food service Market leader in (US$2.8tr, 2017) 36 of 43 countries 2.0x Reaching 2.
Slide 10: Payments: leveraging scaled platform in large addressable market
10 Payments: leveraging scaled platform in large addressable market Strong growth in core PSP business India growing fast Expanding beyond payments Average daily transactions (m)1 Average daily transactions in India (m)1 Loan issuance volume (US$m) 39% 50% 2.5 3x 1.8 1.4 PSP 1H FY18 1H FY19 0.9 +Cre
Slide 11: US$750m targeted M&A in 1H to accelerate growth in core segments
11 US$750m targeted M&A in 1H to accelerate growth in core segments Classifieds Food delivery Payments 1 1 In September the group announced an investment in South Africa’s specialised car buying service, WeBuyCars. This transaction is still subject to regulatory approval and not included in the tota
Slide 12: Financial review
FINANCIAL REVIEW NASPERS
Slide 13: 1H FY19 financial highlights
13 1H FY19 financial highlights 1 Ecommerce profit trajectory continued to improve 2 Classifieds became profitable, including letgo 3 Payments PSP approaching profitability globally 4 Solid results from video entertainment 5 Healthy contribution from Tencent 6 Return to positive free cash flow gener
Slide 14: Synopsis of financials
14 Synopsis of financials Revenue (US$bn)1 Development spend (US$bn)1 23% (29%) -17% (-21%) 0.5 11.0 0.4 9.0 1H FY18 1H FY19 1H FY18 1H FY19 Trading profit (US$bn)1,2 Core headline earnings (US$bn)2 39% (39%) 22% (34%) 2.0 1.7 1.7 1.2 1H FY18 1H FY19 1H FY18 1H FY19 1 Results reported on an economic
Slide 15: Strong revenue growth and improving profitability
15 Strong revenue growth and improving profitability Revenue by segment (US$m)1 Constant currency revenue and trading profit growth by segment (%)1 Revenue Trading profit 46% 38% 34% 29% 29% 24% 17% Ecommerce (18%) 7% 6% -4% Social & internet platforms (64%) Video entertainment (17%) Naspers group E
Slide 16: Trading margins: ecommerce seeing improved operating leverage
16 Trading margins: ecommerce seeing improved operating leverage YoY change in trading profit margins (%)1 TP Margin 1H FY18 TP Margin 1H FY19 28% 10% 0% -10% 6% 11% 9% 18% -20% -8% -30% Ecommerce Classifieds Payments Food delivery Etail Travel 1 Results reported on an economic-interest basis, i.e.
Slide 17: Development spend declined due to increased scale and profitability
17 Development spend declined due to increased scale and profitability Development spend (US$m)1 Older investments New investments 1 084 -17% (-21%) 470 956 388 200 159 270 229 FY17 FY18 1H FY18 1H FY19 1 Development spend represents trading losses of businesses yet to reach scale. Results reported
Slide 18: Strong momentum in profitable ecommerce businesses
18 Strong momentum in profitable ecommerce businesses Financial progress of profitable ecommerce businesses (US$m)1 Revenue Trading profit 1 656 94% (29%) 902 698 465 31% (48%) 352 229 223 170 2 FY17 FY18 1H FY18 1H FY19 1 Results are reported on an economic-interest basis, i.e. equity-accounted inv
Slide 19: Classifieds: now profitable including letgo
19 Classifieds: now profitable including letgo Revenue and trading profit/(loss) (US$m)1 Revenue 628 Trading profit/(loss) 40% (37%) 426 405 289 47 (45) (114) (328) TP Margin -77% TP Margin -18% TP Margin -16% TP Margin 12% FY17 FY18 1H FY18 1H FY19 1 Results reported are on an economic-interest bas
Slide 20: Food delivery: strong topline growth, further strategic investment
20 Food delivery: strong topline growth, further strategic investment Revenue and trading (loss)/profit (US$m)1 Revenue Trading (loss)/profit 223% (79%) 181 166 53 56 5 (30) (8) (41) FY17 FY18 1H FY18 1H FY19 1 Information is reflected on an economic-interest basis, i.e. equity-accounted investments
Slide 21: Payments: investment in credit as PSP approaches profitability
21 Payments: investment in credit as PSP approaches profitability Revenue and trading loss (US$m)1 Revenue Trading loss 294 36% (33%) 186 171 126 17% (58%) (29) (24) (56) (69) TP Margin -37% TP Margin -19% TP Margin -23% TP Margin -14% FY17 FY18 1H FY18 1H FY19 1 In 1H FY18 US$4m (FY18: US$8m) of co
Slide 22: Social and internet platforms: healthy contributions to earnings growth
22 Social and internet platforms: healthy contributions to earnings growth Tencent revenue (RMBm)1 Mail.ru revenue (RUBm)2 33% 30% 237 760 227 798 57 469 51 119 171 368 42 751 151 938 39 396 2016 2017 9M FY17 9M FY18 2016 2017 9M FY17 9M FY18 Tencent operating profit (RMBm)1 Mail.ru EBITDA (RUBm)2 1
Slide 23: Higher ecommerce profitability contributes significantly to central cash flows
23 Higher ecommerce profitability contributes significantly to central cash flows Consolidated trading profit from profitable ecommerce businesses Sources of free cash inflow excluding VE (US$m)1 (US$m) 43% 28% (36%) 544 9 59 380 145 11 121 217 170 Other 332 Payments 247 Classifieds Tencent dividend
Slide 24: FCF: strong turnaround continues
24 FCF: strong turnaround continues Incremental FCF, YoY (US$m)1 135% +US$367m 10 85 (31) 271 185 36 118 (96) 1H FY18 Cash from Working capital Tax paid Capex and leases Investment income 1H FY19 operations 1 FCF defined as EBITDA less adjustments for non-cash items, working capital, taxation, capit
Slide 25: Healthy returns from disposals, M&A focused on core segments
25 Healthy returns from disposals, M&A focused on core segments Acquisitions/Investments over time (US$m)1 Exits (US$m) 1 005 2 200 750 37 ZOOZ Total 2 237 Announced after year-end (US$m)2 99 400 Other Total 499 1H FY18 1H FY19 1 The group committed US$500m to letgo. US$150m of funding has been tran
Slide 26: Continuing to generate excellent returns
26 Continuing to generate excellent returns All internet investments excluding Tencent (FY08 –1HFY19) Current internet portfolio excluding Tencent (US$bn)2 (US$bn)1 17% IRR 22% IRR 2.3X 2.4X 27.6 23.6 12.1 9.9 Invested capital current Market & analyst valuation Invested capital current Market & anal
Slide 27: Methodically taking steps to address the holding company discount
27 Methodically taking steps to address the holding company discount Actions to date Work in progress ✓ Scale ecommerce and improve profitability ✓ Further primary listings 29% organic revenue growth Meaningful reduction in ecommerce trading losses ✓ Further improvements in profitability ✓ Increased
Slide 28: VE / MultiChoice Group (MCG)
28 VE / MULTICHOICE GROUP (MCG)
Slide 29: MCG: Solid results underpinned by subscriber growth and cost control
29 MCG: Solid results underpinned by subscriber growth and cost control Video entertainment financials (US$m)1 Revenue Trading profit 3 677 3 396 3% (7%) 1 775 1 834 -10% (+6%) 370 234 211 287 FY17 FY18 1H FY18 1H FY19 Strong growth in subscribers (m) SA DTH Stable content costs (US$m)2 Improved fre
Slide 30: MCG: listing and unbundling in 1H calendar 2019 will unlock value
30 MCG: listing and unbundling in 1H calendar 2019 will unlock value Pre-transaction structure MCG post-transaction Existing Naspers Single class of shares JSE listed shareholders 20% 80% Internet Media VE JSE listed 25% 75% South Africa Transaction rationale MCG investment case • Naspers moving tow
Slide 31: Outlook
OUTLOOK NASPERS
Slide 32: Thoughts for the future…
32 Thoughts for the future… 1 Drive further profitability in ecommerce units 2 Pursue selective growth opportunities (classifieds, payments and food delivery) 3 Focus on innovation (particularly machine learning) across all segments 4 Take further steps to address the discount 5 Unlock value for sha
Slide 33: Appendix
APPENDIX NASPERS
Slide 34: Group structure
34 Group structure Global platform operator Internet Video Media entertainment6 Social & internet Classifieds B2C Payments Naspers Ventures platforms 100%1 80% 97.6% Food Ventures 31.2% 80% 85% 71.1% 96.1% 22.6% 80.3% 24.5% 28.4% 100% 43.1%3 21.4% 53.5%4 12.1% 100% 80%2 18.8% 22.8% 21.1% 35.7% 37.6%
Slide 35: Glossary of terms
35 Glossary of terms — M&A: Mergers and acquisitions — ADR: American depositary receipt — MCG: MultiChoice Group — COHE: Core headline earnings — MCSA: MultiChoice South Africa — DTH: Direct-to-Home — MAU: Monthly active user — DTT: Digital terrestrial television — PSP: Payment service provider — EB
Slide 36: Thank you
36 Eoin Ryan +1-347-210-4305 THANK YOU InvestorRelations@naspers.com www.naspers.com