Prosus N.v. Class N · EURONEXT:PRX
Prosus N.v. Class N — Debt Investor Presentation (February 2024)
42 slides from Prosus N.v. Class N's debt investor presentation, February 2024
Slide 1: Fixed Income Update
Fixed Income Update February 2024
Slide 2: Forward looking statements
Forward looking statements 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
Slide 3: Agenda
1. Group Update 2. Financial Update Agenda 3. Appendix
Slide 4: Group Update
Group Update
Slide 5: We are making progress quickly
We are making progress quickly Profitable growth bringing our profitability ambition forward to H2 FY24 Ahead of expectation Open-ended share repurchase program while the discount remains elevated On-track Simplified the Group’s structure while maintaining the current economic interest split Complet
Slide 6: We are focused on maximising shareholder value
We are focused on maximising shareholder value Value creation will be driven by execution across our key commitments to shareholders Smartly Managing 1 2 3 the Numerator Improving Effective Tencent growth operations capital allocation & profitability & returns Systematically Share repurchase program
Slide 7: H1 FY24: Our operating businesses are strengthening
H1 FY24: Our operating businesses are strengthening Significant trading margin improvement across the businesses and peer leading growth Food Payments Classifieds Edtech Etail Delivery & Fintech 17% 32%1 32% 11% 4% YoY Revenue growth YoY Revenue growth YoY Revenue growth YoY Revenue growth YoY Reven
Slide 8: Strong growth with accelerating profitability
Strong growth with accelerating profitability Consolidated Ecommerce revenue ~3X rate of our peers … with meaningful acceleration in profitability H1 FY24 Ecommerce revenue growth (%)1 Trading losses (US$’m)1,2 24% growth excl. Etail, (36) compared to peer average of 14% (157) $121m improvement (256
Slide 9: We are focused on improving returns
We are focused on improving returns … Significant fall in IRR Returns weighed down by a few large underperformers NAV (US$bn) and IRR (%)1 iFood 35 Food of Ecommerce portfolio Swiggy 7 Delivery Hero -29 OLX Europe 27 Classifieds OLX Autos -52 18% IRR OLX Brazil 10 EMPG 1 IRR by entity (H1 FY24)3 let
Slide 10: Leveraging insights gained to adapt & improve our approach
… leveraging insights gained to adapt & improve our approach We are refining our investment approach and portfolio management with lessons learned Pursue a more balanced perspective on growth & profit trajectory Ecommerce portfolio racing Invest only where a clear path to profitability can be seen t
Slide 11: Expect smart and disciplined capital allocation
Expect smart and disciplined capital allocation We seek to allocate capital across 3 dimensions We seek to allocate capital to generate the greatest returns over three main channels 1 2 3 P&L Invest Return Operating outlook is strong We are actively exploring We will continue to return value across
Slide 12: Expect more progress on our sustainability journey
Expect more progress on our sustainability journey SBTi verified our science-based climate targets Corporate Supply chain Scope 1 emissions 2 emissions 3 Investments1 100% Scope 1 and 2 GHG 30% reduction of air travel 50% of portfolio2 sets a emissions reduction by emissions by science-based target
Slide 13: Financial Update
Financial Update
Slide 14: H1 FY24 Financial Highlights
H1 FY24 Financial Highlights We are ahead of our H1 FY25 profitability target Financial Summary Trading profit (TP) improved $220m YoY. We are already profitable on an EBITDA basis, and now expect to be profitable on a TP basis for H2 FY24 H1 FY23 H2 FY23 H1 FY24 6X Improvement in Free Cash Flow Con
Slide 15: We are bringing our profitability ambition forward to H2 FY24
We are bringing our profitability ambition forward to H2 FY24 … Significant improvement in profitability, even as we continue to invest in high conviction growth areas Consolidated Ecommerce trading losses (US$’m)1 10 pp margin improvement YoY (11) (47) (36) (149) (157) (221) (256) We are targeting
Slide 16: While continuing to deliver peer-leading revenue growth
… while continuing to deliver peer-leading revenue growth We have built businesses with sustainable revenue platforms for long-term growth H1 FY24 Ecommerce consolidated revenue growth by segments (%)1 Peers Prosus 24% 32% 32% H1 FY24 Ecommerce growth excl. Etail 19% 17% 16% 12% 11% 6% 6% 4% 2% 1% E
Slide 17: Profitability drives meaningful FCF improvement
Profitability drives meaningful FCF improvement Free cash flow reflects improved profitability across our portfolio and increased dividends from Tencent Incremental FCF from continuing operations, YoY (US$’m)1 Free cash flow (excl. Tencent dividend) (US$’m) 6X Improvement YoY (33) (23) (149) 187 68
Slide 18: Tencent's high quality growth model improves profitability
Tencent’s high quality growth model improves profitability Tencent grew revenue 10% with a 36% profit improvement YoY for the 9 months ended 30 September 2023 Tencent revenue (RMB’bn)1 10% Diverse revenue streams in growth businesses 155 145 150 149 135 134 140 Inherent profitability augmented by po
Slide 19: We have proactively enhanced our credit profile over the years
We have proactively enhanced our credit profile over the years Highlights of our journey so far to strengthen our credit profile and financial flexibility Continued growth and profitability IG rated throughout our 14-year Accelerated ambition of Ecommerce profitability in H2 FY24 history in the bond
Slide 20: Defined guidelines to inform decisions on our capital structure
Defined guidelines to inform decisions on our capital structure Investment Grade Rating While our balance sheet allows significant flexibility to absorb short term fluctuations in any one of these metrics, we have outlined the rationale for our sustainable guidelines below: Interest Coverage Ratio H
Slide 21: Strong and liquid balance sheet with increased cash dividends
Strong and liquid balance sheet with increased cash dividends We will manage our balance sheet to an Investment Grade rating 20% increase in dividends to HoldCo Net debt1 of US$18m (US$m) at 30 September 2023 (US$bn) Investment Grade BBB (S&P) / Baa3 (Moody’s) 20% 840 11.8% LTV 82 Based on gross deb
Slide 22: Strong debt metrics with long-dated bond maturities
Strong debt metrics with long-dated bond maturities Debt metrics Bond maturity profile (bn) LTM LTM US$’m 5 Years 10 Years 15 Years Over 20 Years Sep 22 Sep 23 Cash remitted to/generated at Holdco level: (0.7) Tencent dividend 565 758 Classifieds portfolio 196 139 (3.3) Other dividends 60 - (3.7) In
Slide 23: A long-dated debt maturity profile
A long-dated debt maturity profile A strong balance sheet is supportive in this volatile environment 3.1% Cost of Debt Debt maturity profile (US$’bn) Bond €600m Undrawn Group RCF Bond US$2.5bn Bond $1bn $1bn Bond $1.85bn Bond Bond Bond $1.5bn $1.25bn Bond $1.25bn Bond Bond €1bn Bond $1bn Bond €850m
Slide 24: Appendix
1. Share repurchase update 2. H1 FY24 Detailed Results 3. Results of Associates and Joint Ventures Appendix 4. Summary Group Portfolio 5. Glossary
Slide 25: Expect the repurchase programme to continue creating value
1. Share repurchase update 2. H1 FY24 Detailed Results 3. Results of Associates and Joint Ventures 4. Summary Group Portfolio 5. Glossary Expect the repurchase programme to continue creating value While we work to improve the NAV, we are dramatically shrinking the free float $34bn 603m 17% 8% NAV Va
Slide 26: Small sales of Tencent shares fund our open-ended buyback
1. Share repurchase update 2. H1 FY24 Detailed Results 3. Results of Associates and Joint Ventures 4. Summary Group Portfolio 5. Glossary Small sales of Tencent shares fund our open-ended buyback The buyback increases exposure to Tencent per share At our current pace, Prosus will remain Tencent's la
Slide 27: Continued healthy Ecommerce growth
1. Share repurchase update 2. H1 FY24 Detailed Results 3. Results of Associates and Joint Ventures 4. Summary Group Portfolio 5. Glossary Continued healthy Ecommerce growth … Ecommerce revenue from continuing operations ($’bn) Total Ecommerce Economic Interest Consolidated Revenue Associate and JV R
Slide 28: With a significant improvement in profitability
1. Share repurchase update 2. H1 FY24 Detailed Results 3. Results of Associates and Joint Ventures 4. Summary Group Portfolio 5. Glossary … with a significant improvement in profitability Ecommerce trading profit from continuing operations ($’m) Total Ecommerce Economic Interest Organic investment t
Slide 29: iFood is profitable and continues to drive healthy growth
1. Share repurchase update 2. H1 FY24 Detailed Results 3. Results of Associates and Joint Ventures 4. Summary Group Portfolio 5. Glossary iFood is profitable and continues to drive healthy growth Consolidated Food Delivery iFood: Healthy growth and profit improvement2 (US$’m) Core Restaurant Busines
Slide 30: Classifieds grew well ahead of peers, moving to industry level profits
1. Share repurchase update 2. H1 FY24 Detailed Results 3. Results of Associates and Joint Ventures 4. Summary Group Portfolio 5. Glossary Classifieds grew well ahead of peers, moving to industry level profits Core Classifieds drives peer leading profitable growth OLX Autos losses wind-down Consolida
Slide 31: PayU significantly improves profitability
1. Share repurchase update 2. H1 FY24 Detailed Results 3. Results of Associates and Joint Ventures 4. Summary Group Portfolio 5. Glossary PayU significantly improves profitability Consolidated Payments & Fintech Strong growth and profit improvement in both PSP and new initiatives (US$’m) Sustained C
Slide 32: Edtech is evolving as it processes the impact of GenAI
1. Share repurchase update 2. H1 FY24 Detailed Results 3. Results of Associates and Joint Ventures 4. Summary Group Portfolio 5. Glossary Edtech is evolving as it processes the impact of GenAI We are evolving our products to leverage new technology and mitigate the impact on trading profit Consolida
Slide 33: eMAG Romania profitable and well positioned in its market
1. Share repurchase update 2. H1 FY24 Detailed Results 3. Results of Associates and Joint Ventures 4. Summary Group Portfolio 5. Glossary eMAG Romania profitable and well positioned in its market Consolidated Etail Romania delivered profitable growth - other businesses will follow2 (US$’m) New initi
Slide 34: Group Consolidated Results
1. Share repurchase update 2. H1 FY24 Detailed Results 3. Results of Associates and Joint Ventures 4. Summary Group Portfolio 5. Glossary Group Consolidated Results Consolidated Segmental Results from continuing operations Revenue Adjusted EBITDA Trading profit / (loss) YoY YoY Margin YoY Margin US$
Slide 35: Proportionate Results from Associates and Joint Ventures
1. Share repurchase update 2. H1 FY24 Detailed Results 3. Results of Associates and Joint Ventures 4. Summary Group Portfolio 5. Glossary Proportionate Results from Associates and Joint Ventures Associates and Joint Venture Proportionate Results1 Revenue Adjusted EBITDA Trading profit / (loss) YoY %
Slide 36: Group Economic Interest Results
1. Share repurchase update 2. H1 FY24 Detailed Results 3. Results of Associates and Joint Ventures 4. Summary Group Portfolio 5. Glossary Group Economic Interest Results Economic Interest Results from continuing operations1 Revenue Adjusted EBITDA Trading profit / (loss) YoY % YoY Margin YoY Margin
Slide 37: Core HE nearly doubles driven by improved profitability
1. Share repurchase update 2. H1 FY24 Detailed Results 3. Results of Associates and Joint Ventures 4. Summary Group Portfolio 5. Glossary Core HE nearly doubles driven by improved profitability Incremental Core HE1 from continuing operations, YoY (US$’m) 96% on a per share basis 85% (118%) 238 187 3
Slide 38: Food and Classifieds minority investments
1. Share repurchase update 2. H1 FY24 Detailed Results 3. Results of Associates and Joint Ventures 4. Summary Group Portfolio 5. Glossary Food and Classifieds minority investments Food Delivery Associates & Joint Ventures1,2 Classifieds Associates & Joint Ventures1 2 (US$’m) (US$’m) 41% (25%) H1 FY2
Slide 39: Payments and Fintech and Edtech minority investments
1. Share repurchase update 2. H1 FY24 Detailed Results 3. Results of Associates and Joint Ventures 4. Summary Group Portfolio 5. Glossary Payments and Fintech and Edtech minority investments Payments and Fintech Associates & Joint Ventures1 Edtech Associates & Joint Ventures1,2 2 (US$’m) (US$’m) H1
Slide 40: Group portfolio companies
1. Share repurchase update 2. H1 FY24 Detailed Results 3. Results of Associates and Joint Ventures 4. Summary Group Portfolio 5. Glossary Group portfolio companies 43% Local SA assets 100% 100% Social & internet Ecommerce platforms 25% Payments & Classifieds Food Delivery Etail Edtech Ventures Finte
Slide 41: Glossary
1. Share repurchase update 2. H1 FY24 Detailed Results 3. Results of Associates and Joint Ventures 4. Summary Group Portfolio 5. Glossary Glossary Consolidated Results: Results of subsidiaries only, companies which the Group controls. Economic Interest: A non-IFRS measure representing the consolidat
Slide 42: For further information
For further information: Visit our website: www.prosus.com or www.naspers.com Email: InvestorRelations@prosus.com 42