Naspers Limited Class N · JSE:NPN
Naspers Limited Class N — Investor Day (July 2010)
109 slides from Naspers Limited Class N's investor day presentation, Jul 23, 2010
Slide 1: A Leading Emerging Market Media Company
A Leading Emerging Market Media Company Analyst Day Presentation, London, 23 July 2010
Slide 2: Agenda
Agenda Naspers corporate strategy Overview of the FY10 financials Investing in internet for long term growth Growth opportunities in pay-TV Conclusion
Slide 3: Broad emerging market footprint
Broad emerging market footprint Focus on emerging markets with high growth potential 3
Slide 4: Operations across multiple media
Operations across multiple media Internet Pay-TV Print Technology 4
Slide 5: Diversified revenue streams
Diversified revenue streams FY10 Revenue* by Type FY10 Revenue* by Business Subscription (41%) Advertising (15%) PayTV (45%) Internet (25%) e-Commerce, IM & Games (20%) Technology (3%) Technology (3%) Print (27%) Printing (14%) Other (7%) Exposure to advertising-related revenues limited Spread of op
Slide 6: Track record over 10 years: Revenue
Track record over 10 years Revenue* (ZARm) 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 - 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 * Based on economic interest, i.e. assuming all investments are proportionately consolidated 6
Slide 7: Track record over 10 years: EBITA
Track record over 10 years EBITA* (ZARm) 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 - 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 (1,000) * Based on economic interest, i.e. assuming all investments are proportionately consolidated 7
Slide 8: Track record over 10 years: Core headline earnings
Track record over 10 years Core headline earnings (ZARm) 6,000 5,000 4,000 3,000 2,000 1,000 - 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 (1,000) * Based on economic interest, i.e. assuming all investments are proportionately consolidated 8
Slide 9: Track record over 10 years: Dividend per share
Track record over 10 years Dividend per share (ZAc) 250 200 150 100 50 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 * Based on economic interest, i.e. assuming all investments are proportionately consolidated 9
Slide 10: Focus on longer-term growth
Focus on longer-term growth “Naspers aims to be the leading integrated media group in emerging markets” Building subscriber bases Maintain a local approach Growing internet businesses Quality customer service Latest technology Best entrepreneurs 10
Slide 11: Summary of key strengths
Summary of key strengths • Predictable cash flow from leading positions Leading market • Pay-TV cash generative; revenue visibility from subscriptions positions, strong growth • Increasing internet contribution with low capital intensity • Diversified revenue streams across various media Diversified
Slide 12: Key points
Key points Naspers corporate strategy An overview of the FY10 financials Investing in internet for long term growth Growth opportunities in pay-TV Conclusion and questions
Slide 13: FY10 financial highlights
FY10 financial highlights Mar 09 Mar 10 Revenue (ZARbn) EBITDA (ZARbn) EBITDA Margin (%) Up 5% Up 8% Up 3% 3.2 2 24 2.8 28.0 6.5 22.6 23.2 26.7 6.0 Core Headline Earnings(ZARbn) Core HEPS(ZAR) DPS(ZAR) Up 22% Up 21% Up 14% 1.9 2.4 5.3 1.26 2.35 4.4 11.79 2.07 13
Slide 14: Summary consolidated income statement
Summary consolidated income statement Mar 09 Mar 10 ZARm ZARm 1 Revenue growth +5% Revenue 26,690 27,998 1 +11% in constant currency EBITDA 6,026 6,496 2 2 Operating profit 3,783 4,041 EBITDA +8%, margin improvement due to cost control Net finance costs (303) (421) 3 Share of equity accounted result
Slide 15: Some effect of strong ZAR on figures
Some effect of strong ZAR on figures Contribution by offshore operations affected by rand strength upon translation Revenue growth YoY EBITA growth YoY 30,000 5,900 +11% +18% 29,500 5,800 5,700 29,000 5,600 28,500 +5% 29,576 5,500 +10% 5,826 28,000 5,400 27,500 27,998 5,447 5,300 27,000 5,200 Report
Slide 16: Solid operating performance
Solid operating performance Economic Interest (ZARm) Growth / Margin March 08 March 09 March 10 Rev. CAGR: 2008 – 2010 37,251 • Pay-TV: 20% 34,505 Revenue 25,877 • Internet: 48% • Technology: 6% • Print Media: (1%) EBITDA Margin (2010) (1) 9,878 • Pay-TV: 34% 8,484 6,005 • Internet: 31% EBITDA • Tec
Slide 17: Development spend flat; to increase
Development spend flat; to increase Development costs per business division Mar 09 Mar 10 1 % Change ZAR125m for e-commerce ZARm ZARm ZAR76m for ibibo Internet 483 511 6% 1 ZAR67m for 24.com ZAR96m for mobile Pay-TV 196 424 116% 2 Technology 343 239 -30% Print 189 66 -65% 2 ZAR246m for mobile TV Tot
Slide 18: Income from associates
Income from associates FY10 income from associates up 50% YoY ZARm 2,058 1,473 654 339 95 2006 2007 2008 2009 2010 18
Slide 19: Dividends received from associates
Dividends received from associates Dividends from associates becoming a good source of additional cash flow ZARm 500 400 191 300 200 296 100 88 98 41 44 - 2006 2007 2008 2009 2010 Normal Special Dividends from associates accounted for 12% of FY10 FCF 19
Slide 20: Free cash flow up 70%
Free cash flow up 70% Free cash flow from operations Mar 09 Mar 10 ZARm ZARm 1 Operating cash flow 5,814 7,264 Internet ZAR224m Pay-TV ZAR591m Capex (1,232) (1,403) 1 Technology ZAR199m Print ZAR389m Finance leases (450) (439) 22 Tax (1,798) (1,786) Dividends from Tencent , mail.ru and Abril Investm
Slide 21: Net consolidated debt
Net consolidated debt Group net consolidated debt Mar 10 1 ZARm Largely to fund acquisitions Net cash – South Africa 2,968 Net debt – offshore (US$634m) (4,657) 1 2 Excluding transponder leases of Closing net debt (1,689) 2 ZAR2bn considered an operating cost Debt facilities extended to US$1.72bn Gr
Slide 22: Bond - summary of key terms
Bond - summary of key terms Issuer Myriad International Holdings B.V. Naspers Limited Guarantor Naspers Limited (Parent Guarantor) 85% Offer Size US$700m Media 24 Holdings 100% (Pty) Ltd Coupon 6.375% Tenor 7 Years Issue Rating Moody’s: Baa3; Fitch: BBB- MIH Holding Limited 80% Listing Irish Stock E
Slide 23: Debt maturity profile
Debt maturity profile Debt maturity profile (ZARm) – before Bond 6,889 2,057 1,512 37 - 2010 2011 2012 2013 2014 2017 Debt maturity profile (ZARm) – after Bond 7,307 Bond Offering 5,250 1,512 1,639 2,057 37 2010 2011 2012 2013 2014 2017 23
Slide 24: Investing in internet for long term growth
Naspers corporate strategy An overview of the FY10 financials Investing in internet for long term growth Growth opportunities in pay-TV Conclusion and questions
Slide 25: Emerging market focus
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Slide 26: Internet strategy overview
Internet strategy overview Mobile Portals value-added services Social Instant networking messaging Community and e-mail Payment Online games platforms E-commerce 26
Slide 27: Community platforms
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Slide 29: Mail.ru
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Slide 30: Mail.ru
Mail.ru Portals Social Instant messaging networking Mail.ru and e-mail Payment Online games platforms 30
Slide 31: mail.ru: Platform and services
mail.ru: Platform and services General Portal • No.1 General Portal in Russia • 78m Unique Visitors • No.1 News Portal • 16 billion Page Views/Month Mobile IM and Mail SNS • Extension of all services • No.1 Mail Provider in Russia • No.2 player in Russia • 1.3m Unique Visitors • >60m Active mail acc
Slide 32: Monetization of verticals
Monetization of verticals Advertising Listings 32
Slide 33: IM: Key metrics
IM IM: KEY METRICS • Registered users – 79 million • Active base – 3.3m • Messages sent per day – 212 million • Peak concurrent users – 2.5m • Deep integration with email service • Deep integration with gaming 33
Slide 34: User generated content
User generated content Photo Video 34
Slide 35: Social networking
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Slide 36: Social networking
Social networking Premium SMS Voting 36
Slide 37: Dating
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Slide 38: Gaming
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Slide 39: Virtual Currency
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Slide 40: Gaming
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Slide 41: Internet: mail.ru (Russia)
FY10 Revenue* by Type Internet: mail.ru (Russia) Revenue mix FY10* Revenue mix incorporating Astrum Advertising (75%) Value-added Services (25%) Advertising (50%) Value-added Services 50%) 41
Slide 42: mail.ru: Opportunities and risks
mail.ru: Opportunities and risks Opportunities • Games (MMO, casual social games) • Online advertising (budgets move online) • Micro-payments Risks • Slow economic recovery • Currency fluctuation 42
Slide 43: ibibo
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Slide 44: ibibo
Internet strategy overview Portals Social Instant messaging networking ibibo and e-mail Payment Online games platforms E-commerce 44
Slide 45: Market overview
Market overview Indian internet market • 9mn broadband connections and 500mn mobile phones. • 3G and Broadband Wireless auctions completed – Roll out by 2011. Investments of $15bn for 3G and $2.8bn for Broadband. • Facebook topples Orkut in India. • Online ad market : $160mn • Online classifieds mar
Slide 46: Ibibo focus areas
Ibibo focus areas Mobile Social Games E-Commerce Payments 46
Slide 47: Significant milestones in 09-10
Significant milestones in 09-10 7 Integration of social games With Facebook connect 6 Travel crosses $1Mn per month sales 5 Launch of e-commerce platforms in record time– Auctions, Travel, Payments & Publisher Network 4 Tencent JV 3 Ibibo becomes significant social & casual games platform in India 2
Slide 48: Social gaming
Social gaming Role playing games Multiplayer social games Talent Social games 48
Slide 49: Tencent
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Slide 50: Tencent
Tencent Mobile Portals value-added services Social Instant networking messaging Tencent and e-mail Payment Online games platforms E-commerce 50
Slide 51: Tencent overview
Tencent overview • Closed period • Listed entity • Established in 1998 • Leading provider of IVAS & MVAS in China • Excellent management team 51
Slide 52: Financial profile (RMBm)
Financial profile (RMBm) 14,000 50% 48% 12,000 48% 10,000 45% 12,440 46% 8,000 43% 44% 6,000 7,155 42% 4,000 6,020 3,821 40% 2,000 3,246 1,635 - 38% 2008 2009 2010 Revenue Operating profit Operating profit margin 52
Slide 53: Revenue breakdown (Mar 2010)
Revenue breakdown (Mar 2010) Advertising & other 8% MVAS 15% IVAS gaming 43% IVAS other 34% 53
Slide 54: E-commerce
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Slide 55: Focus on e-commerce
Focus on e-commerce E-commerce as a % of retail USA Poland Russia Hungary Ukraine 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 2006 2007 2008 2009 2010 2011 2012 55
Slide 56: Allegro
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Slide 57: Allegro: Market dynamics
Allegro: Market dynamics Regional Focus: CEE / CIS / Russia 470M 133m online Avg. 10k USD Population (28% penetration) GDP per capita 57
Slide 58: Allegro
Allegro Allegro Payment platforms E-commerce 58
Slide 59: Allegro
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Slide 60: Allegro: Business model
Allegro: Business model Auctions: 12 months to 31 March 2010* USD 2,5bn 156m USD 175m 70bn page views gross merchandise transactions revenue value (GMV) +20% +34% +28% +28% Auctions: 12 months to 31 March 2009* USD 1,98bn 116m USD 135m 58bn page views gross merchandise transactions revenue value (GM
Slide 61: Allegro: Opportunities and risks
Allegro: Opportunities and risks Opportunities • Continued growth of internet penetration across core markets • Low retail density • Diversification of transaction revenue Risks • Slower than expected recovery of various economies • Currency 61
Slide 62: BuscaPe
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Slide 63: Buscape
Buscape Buscape Payment platforms E-commerce 63
Slide 64: Attractive macro data
Attractive macro data Brazil internet users (million) Brazil internet retail (R$ million) 31,210 147.1 128.1 24,384 107.1 18,591 89.2 74.1 14,179 60.5 50.9 10,678 40.8 7,897 30.2 5,495 3,608 2,348 2005 2006 2007 2008 2009 2010 2011 2012 2013 2005 2006 2007 2008 2009 2010 2011 2012 2013 64
Slide 65: Integrated offering
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Slide 66: BuscaPé
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Slide 67: AEM | Va OI pag
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Slide 69: email
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Slide 70: Agenda
Agenda Naspers corporate strategy Overview of the FY10 financials Investing in internet for long term growth Growth opportunities in pay-TV Conclusion
Slide 71: Geographic footprint
Geographic footprint MultiChoice group synergies 1 Procurement 2 Centralised systems 3 Research and development Mali 4 Satellite capacity Niger Eritrea Burkina Faso Sudan Benin Guinea Togo Nigeria Ghana Ivory Ethiopia Central Coast African Rep. Cameroon Equatorial Uganda Guinea Gabon Democratic Keny
Slide 72: Southern African satellite footprint
Southern African satellite footprint Intelsat IS 7 KU Band 1 13 transponders 2 Total cost US$24m per annum 3 IS 7 replacement plan for Nov 2012 Mali Niger 4 Capacity increase to 20 transponders Eritrea Burkina Faso Sudan Benin Guinea Togo Nigeria Ghana Ivory Ethiopia Central Coast African Rep. Camer
Slide 73: Sub-Saharan Africa satellite footprint
Sub-Saharan Africa satellite footprint Eutelsat W7 Ku Band 1 20 transponders 2 Total cost US$30m per annum Mali Niger Eritrea Burkina Faso Sudan Benin Guinea Togo Nigeria Ghana Ivory Ethiopia Central Coast African Rep. Cameroon Equatorial Uganda Guinea Gabon Democratic Kenya Rep. of Rwanda Congo Bur
Slide 74: Key competitive advantages
Key competitive advantages 1 Capital investment 2 Level of Expertise 3 Regulatory Framework 4 High Cost of Content 5 Lack of Infrastructure 74
Slide 75: South Africa
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Slide 76: Pay-TV SA: Market dynamics
Pay-TV SA: Market dynamics Total TV households (m) 10.0 40% 9.8 9.8 35% 9.6 9.5 30% 9.4 29% 25% 9.2 9.2 9.1 25% 9.0 20% 9.0 21% 15% 8.8 16% 15% 8.6 10% 2006 2007 2008 2009 2010 TV Households Pay TV Penetration Source: ScreenDigest 76
Slide 77: Pay-TV SA: Market dynamics
Pay-TV SA: Market dynamics SA vs. other GEM markets 82% 79% 55% 40% 41% 31% 29% 25% 26% 17% 15% 6% 7% Russia Turkey SA UAE Mexico Nigeria Hungary Czech Germany Saudi Brazil Poland Qatar Source: Informa Media & Telecom, BofA Merrill Lynch Global estimates, ScreenDigest 77
Slide 78: Pay-TV SA: Competitive overview
Pay-TV SA: Competitive overview Pay-TV Direct Free-to-Air Indirect 78
Slide 79: Pay-TV SA: Bouquets
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Slide 80: Pay-TV SA: Key regulatory issues
Pay-TV SA: Key regulatory issues 1 Digital Terrestrial Transmission (DTT) 2 Sport broadcasting services 3 Mobile TV frequency licenses 80
Slide 81: Pay-TV SA: Operational overview
Pay-TV SA: Operational overview Gross subscribers (‘000) 2,852 2,401 1,948 1,651 1,467 Mar 06 Mar 07 Mar 08 Mar 09 Mar 10 81
Slide 82: Pay-TV SA: Operational overview
Pay-TV SA: Operational overview Digital subscriber mix 60% 67% 30% 23% 9% 10% Mar 09 Mar 10 Premium Compact Other 82
Slide 83: Pay-TV SA: Operational overview
Pay-TV SA: Operational overview Pricing (1) (ZAR per month) 438 464 411 386 308 308 311 192 204 175 175 Mar 08 Mar 09 Mar 10 Mar 11 Premium Compact ARPU* (1) Excludes VAT; does not include decoder price or “decoder care”; DStv also offers an “EasyView” entry bouquet for ZAR20 per month, +6% increase
Slide 84: Pay-TV SA: Financial overview
Pay-TV SA: Financial overview Revenue breakdown (March 2010) Subscription (79%) Hardware sales (5%) Advertising (10%) Other (6%) 84
Slide 85: Pay-TV SA: Financial overview
Pay-TV SA: Financial overview EBITA (ZARm) and EBITA margin 40% 37% 4,339 3,782 33% 35% 3,392 31% 2,069 1,595 Mar 06 Mar 07 Mar 08 Mar 09 Mar 10 EBITA EBITA margin 85
Slide 86: Sub-Saharan Africa
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Slide 87: Pay-TV SSA: Market dynamics
Pay-TV SSA: Market dynamics Angola Botswana Ghana Kenya Namibia Nigeria Tanzania Uganda Zambia TOTAL TV Households (m) 0.8 0.1 1.6 2.6 0.2 12.7 3.2 1.8 0.8 23.8 Pay-TV Penetration 27% 32% 5% 4% 31% 6% 3% 3% 10% 6% Source: CIA Factbook, Market Research 87
Slide 88: Pay-TV SSA: Competitive overview
Pay-TV SSA: Competitive overview 88
Slide 89: Pay-TV SSA: Operational overview
Pay-TV SSA: Operational overview Gross subscribers (000s) 1,099 916 686 543 419 Mar 06 Mar 07 Mar 08 Mar 09 Mar 10 89
Slide 90: Pay-TV SSA: Operational overview
Pay-TV SSA: Operational overview Digital subscriber mix 50% 57% 41% 34% 9% 9% Mar 09 Mar 10 Premium Family & Compact Other 90
Slide 91: Pay-TV SSA: Operational overview
Pay-TV SSA: Operational overview Subscriber breakdown (March 2010) Nigeria (41%) Angola (15%) Zambia (6%) Kenya (7%) Namibia (5%) Rest of Africa (26%) 91
Slide 92: Pay-TV SSA: Operational overview
Pay-TV SSA: Operational overview Pricing (US$, per month) 70 72 74 68 52 49 44 28 25 25 25 19 19 19 19 Mar 08 Mar 09 Mar 10 Mar 11 Premium Compact Family ARPU* 92
Slide 93: Pay-TV SSA: Financial overview
Pay-TV SSA: Financial overview Revenue breakdown (March 2010) Subscription (94%) Hardware sales (6%) Other (1%) 93
Slide 94: Pay-TV SSA: Financial overview
Pay-TV SSA: Financial overview EBITA (US$m) and EBITA margin 38% 37% 196 34% 181 38% 160 134 32% 93 2006 2007 2008 2009 2010 EBITA EBITA margin 94
Slide 95: Pay-TV drivers
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Slide 96: Exclusive studio/channel agreements
Exclusive studio/channel agreements 96
Slide 97: Exclusive sport rights
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Slide 98: Investment in local content
Investment in local content 98
Slide 99: Decoder subsidies
Decoder subsidies Decoder Subsidies (ZARm) vs. Subscribers (m) 900 4.0 800 3.5 700 600 3.0 Subscribers (m) ZARm 500 2.5 400 300 2.0 200 1.5 100 - 1.0 2006 2007 2008 2009 2010 Decoder Subsidy Total Subscribers (RHS) 99
Slide 100: Decoder subsidies
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Slide 101: Strategy & future growth opportunities
Strategy & future growth opportunities
Slide 102: Innovation: New services all the time
Innovation: New services all the time 102
Slide 103: Pay-TV strategy
Pay-TV strategy Increased market penetration Leadership in content supply Effective systems and processes Development of new products and services 103
Slide 104: IPtv services in all WC 2010 stadiums
IPtv services in all WC 2010 stadiums 104
Slide 105: Catch up services - PVR
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Slide 106: Catch up service - Online
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Slide 107: Transactional VOD – PVR (Oct 2010)
Transactional VOD – PVR (Oct 2010) 107
Slide 108: Transactional VOD – PVR (Oct 2010)
Transactional VOD – PVR (Oct 2010) 108
Slide 109: Transactional VOD – Online (Oct 2010)
Transactional VOD – Online (Oct 2010) 109