Financial results presentation - Naspers · • Launched real estate and car vertical apps in our...
Transcript of Financial results presentation - Naspers · • Launched real estate and car vertical apps in our...
Financial results presentationFor the year ended 31 March 2016
Important information
2
This presentation 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”, “endeavour” and similar expressions are intended to identify such forward-looking statements, but are not the exclusive means of identifying such statements.
While these forward-looking statements represent our judgments and future expectations, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. These include key factors that could adversely affect our businesses and financial performance.
We are not under any obligation to (and expressly disclaim any such obligation to) update or alter our forward-looking statements whether as a result of new information, future events or otherwise. Investors are cautioned not to place undue reliance on any forward-looking statements contained herein.
STRATEGIC OVERVIEW
FY16 Overview: building platforms to optimise returns
4
LEAD IN ECOMMERCE
TARGET HIGH-GROWTH
BUSINESS MODELSPURSUE SCALE
TRANSFORM FURTHER INTO
MOBILE
OPTIMISE RETURNS
Lead in ecommerce
5
Local leadership positions Global app leadership
Segment #1 positions Total # of markets
Classifieds 34 40
B2C 9 11
Payments 6 16
Global classifieds app sessions/day (m)
eBay
Schibsted
Naspers
2.2x
Source: SimilarWeb *As per Jan 2016.
Target high-growth business models
6
Local classifieds Bus ticketing Mobile classifieds Food delivery
Daily net new listings Bus tickets sold Daily net new listings USA Number of orders - Brazil
Mar 15 Mar 16
37%
FY15 FY16
56%
W1 W15
377%
Mar 15 Mar 16
148%
Source: Company data
Pursue scale
7
Classifieds: expanding our footprint Payments: accelerating local growth
TPV growth* (%), 2015–2016
148
123
46
Russia Turkey India
Source: Company data
• Took control of leading Russian classifieds site
• Launched real estate and car vertical apps in our core markets
* Currency neutral, i.e. YoY growth reflected in local currencies.
7.2
5.24.7
2.41.6
0.8
0.70.8
2.6
Population Population over16
Mobile users Smartphones PC's
Growth to 2020
2015
Further smartphone growth will transform the world
Transform further into mobile
8
Other
Source: Worldbank, GSMA, Apple, Google, a16z
Global population (bn)
Mobile as a % of total user time spent across Naspers platforms,
Q4 FY2016
53%
Source: SimilarWeb
Optimise returns
9
Improve unit economics
B2C OPEX per order (US$)
Source: Company data
Consolidate
• Merged US operations of letgo and Wallapop
• +US$100m in new financing
• Accelerated path to leadership
• Integrated Fashion Days into eMag business
8.8 6.4
FY15 FY16
iFood Brazil EBITDA (US$m)
(9.6) (11.0)
(4.5)
0.5
1Q15 2Q15 3Q15 4Q15
27%
Reduce development spend
Ecommerce development spend* as % of revenues (fx neutral)
39%
33%
FY15 FY16
*Excludes associates, as well as new investments in Letgo and India Hotels.
FINANCIALS
Synopsis of financials
11
1,030 1,246
285
FY15 FY16
Core headline earnings (US$m)
11,541 12,224
1,576
FY15 FY16
Revenue* (US$m)
6% (22%)
953 961
121
FY15 FY16
Development spend* (US$m)
1% (14%)
1,901 2,246
362
FY15 FY16
Trading profit* (US$m)
18% (38%)
255 298
FY15 FY16
Core HEPS (USc)
17%
4.70 5.20
FY15 FY16
DPS (ZAR)
11%21% (49%)
*Results reported on an economic interest basis, i.e. equity accounted investments are proportionately consolidated. Numbers in brackets represent year-on-year growth in local currency, excluding M&A.
Currency impact
Revenue growth driven by Tencent and ecommerce
12
Incremental revenue* by segment, YoY (US$m)
Revenue* by segment (US$m)
Ecommerce (22%)
Listed investments (46%)
Video entertainment (28%)
Media & other (4%)
Revenue* (US$m)
9,919 11,541 12,224
1,576
FY14 FY15 FY16
Currency impact
6% (22%)
*Results reported on an economic interest basis, i.e. equity accounted investments are proportionately consolidated. Numbers in brackets represent year-on-year growth in local currency, excluding M&A.
1,574 ( 1,576 )
11,541
FY15 Ecommerce Listed investments Video entertainment Media & other M&A Forex FY16
12,224
590 (4) (295)
6% (22%)
394
24% 35% 10% 1% 3% 14%
Development spend flat on an economic interest basis
13
Consolidated development spend (US$m)
Classifieds (39%)
Etail (32%)
Other ecommerce (18%)
Video entertainment (9%)
Media (2%)
Development spend* by segment (US$m)
*Results reported on an economic interest basis, i.e. equity accounted investments are proportionately consolidated. Numbers in brackets represent year-on-year growth in local currency, excluding M&A.
Incremental development spend* by segment, YoY (US$m)
961
193
953
FY15 New investments Operating Associates Forex FY16
138(202)
1% (14%)20% 21% 14% 13%
138 (121)
737 820
515
193
103
FY14 FY15 FY16
Operating New investments
14% (1%)
z Currency impact
Ecommerce continues to gain traction
14
Revenue splitRevenue and trading losses* (US$m)
Etail (62%)
Marketplace (13%)
Naspers Ventures (6%)
Classifieds (8%)
Payments (5%)
Travel (3%)
Other (3%)
Constant currency revenue growth by type
67%
46%
27% 26%20% 14%
Travel Classifieds Etail NaspersVentures
Payments Marketplace
*Results reported on an economic interest basis, i.e. equity accounted investments are proportionately consolidated. Numbers in brackets represent year-on-year growth in local currency, excluding M&A.
1,986
2,492 2,647
(516) (543)
397
1 2 3 4 5 6 7 8 9 10
Revenue Trading losses New investments
6% (24%)
28% (31%)
FY14 FY15 FY16
41
(193)
(541)
Currency impact
765 774
217 288
130
FY 15 FY 16
1 2 3 4 5 6 7
Revenue Trading profit
Profitable ecommerce businesses gaining momentum
15
Number of profitable ecommerce entities
1521
FY15 FY16
Financial progress of profitable entities (US$m)
Currency impact
33
1% (18%)
33% (48%)
VE financials reflective of challenging macro environment
16
Video entertainment (VE) financials* (US$m)
Development spend (US$m) Programming and production costs (US$m) Capital expenditure (US$m)
3,582 3,830 3,413
841 732 610
FY 14 FY 15 FY 16
1 2 3 4 5 6 7 8 9 10
Revenue Trading profit
11%
17%
977
1,133 1,046
FY14 FY15 FY16
462
203
127
FY14 FY15 FY16
166
206
85
FY14 FY15 FY16
37%
8%
59%
Note: Local content spend increased 12% YoY to ZAR2.9bn
*Based on economic interest, i.e. equity accounted investments are proportionately consolidated.
Avito a transformational M&A transaction
17
Etail (8%)
Classifieds (89%)
Naspers Ventures (2%)
Other (1%)
FY16 M&A by segment (US$m) Acquisition spend over time (US$m)
465 420
FY14 FY15 FY16
Other
1,495
Etail
Various
4yr avg US$442m (Mar12 – Mar15)
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Summarised income statement
US$m Mar 15 Mar 16
Revenue* 11,541 12,224
Less: Equity-accounted investments (4,972) (6,294)
Consolidated revenue 6,569 5,930
Trading profit 298 179
Trading margin 5% 3%
Net finance costs (251) (352)
Share of equity accounted results 1,475 1,289
- excluding net gain resulting from remeasurements** 977 1,038
- net gain resulting from remeasurements 498 251
Impairments (98) (341)
Taxation (338) (260)
Net profit 1,260 1,001
Core headline earnings 1,030 1,246Core headline EPS (US$) 2.55 2.98
*Based on economic interest, i.e. equity accounted investments are proportionately consolidated.** Remeasurements refer to business combination-related gains and losses.
Free cash flow affected by weaker results from VE outside SA
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FCF breakdown (US$m)
(36)
FY15 Operating profit Working capital Capex Increased dividends Other FY16
(96)
(24)
64
46
8
(38)
Balance sheet strong following equity raise
20
US$m Mar 16
Debt (1): (offshore US$2.9bn) (2,926)
Cash: (South Africa US$1.2bn) 1,713
Closing net debt (1,213)
Gearing 12%
(1) Excludes satellite lease liabilities (US$836m) and non-interest bearing debt (US$159m)
Group net consolidated debt (US$m)
1,461
1,994
1,213
23%30%
12%
-30%
-20%
-10%
0%
10%
20%
30%
-
FY14 FY15 FY16
Net debt Gearing %
INTERNET
B2C: building scale in etail and structured marketplaces
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B2C: FY16 GMV by region*
India & SE Asia (29%)
Europe (65%)
Africa & Middle East (6%)
B2C: Revenue* (US$)
10% (24%)
1,376
1,812
1,988
244
FY14 FY15 FY16
*Includes etail, structured and unstructured marketplaces. Results reported on an economic interest basis, i.e. equity accounted investments are proportionately consolidated. Numbers in brackets represent year-on-year growth in local currency, excluding M&A.
53%
22%
18%
7%Other
Snapdeal
Amazon
Flipkart
India B2C: Flipkart well positioned
23
Share of time spent in mobile apps (March 2016)
Source: SimilarWeb, company data
Flipkart mobile monthly active users (m)
Mar 15 Mar 16
59%
Lead
ing
ho
rizo
nta
l B
2C
pla
tfo
rms
in In
dia
Allegro: accelerating growth and improving profitability
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FY16 financial summary (PLNm)
Annual GMV growth rate
5.1%
9.0%
12.2%
Mar 14 Mar 15 Mar 16
1,140
462370
Revenue Trading profit Free cash flow
Registered
users
20 MM+ 90%Brand recognitionActive B2C
merchants
100 K+
Online price comparison business in Poland
Internet brand in Poland
Shopping destination in Poland (ex-food)#1
#1
#1
FY15 FY16ibibo Nearest competitor
India travel: capitalising on a large opportunity
25
911
1314
1719
2015 2016 2017 2018 2019 2020
India OTA market to grow at 5yr-CAGR of 16% Ibibo outpacing competition on gross bookings
#1 in Hotels, outgrowing competition
37% 31%
Source: Goldman Sachs, Phocuswright
Tran
sact
ion
vo
lum
e (‘
00
0)
GM
V (
US$
bn
)
#2 in Air, growing faster than competition #1 in Bus ticketing, strong growth
FY15 FY16
Tran
sact
ion
vo
lum
e (‘
00
0)
Tran
sact
ion
vo
lum
e (‘
00
0)*
* Standalone hotel transaction volumes.
FY15 FY16
ibibo Nearest competitor
FY15 FY16
ibibo Nearest competitor
55% 12%
Gro
ss b
oo
kin
gs (
US$
m)
4X 3X 52% 28% 59%
Classifieds: attractive business model, great returns at maturity
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2015 Revenues in US$ millions
2015 EBITDA margins
114
140
183
199
413
437
Blocket
Trademe
Finn
Leboncoin
Autotrader
Scout24
58%
67%
44%
62%
56%
42%
Blocket
Trademe
Finn
Leboncoin
Autotrader
Scout24
Source: Annual reports
Market leaders generate substantial revenues…
… at high EBITDA margins
Classifieds: massive footprint for the OLX Group
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+20Offices
40Countries
+2,000Employees
Global footprint
+4.3APP RATING
#1 app 20 COUNTRIES (1)
Mobile leadership
+1.7bnMONTHLY
VISITS
+35bMONTHLY
PAGE VIEWS
Scale
1) Google play store; shopping/lifestyle categoriesNote: exlcudes letgo, includes associates on a proportionate basis
Classifieds: building leading platforms
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Bring it to the next level
- US app-only attack
- Launch more car and real estate verticals
- Leverage Avito
Monetisationcountries
Ramp monetisation to full potential through
knowledge sharing
Key investment countries
Mature consumer-to-consumer classifieds trade
Manage ROI on marketing
Emerging markets
Identify growth models
Limit spend until
classifieds’ potential is proven
Build an outstanding operating company
10Countries
- Technology
- Brands
- Talent
29
FY16 Marketing spend* (US$m)
111 98
120 139
24
48
H1 H2
1 2 3 4 5 6 7
FY15 FY16 Currency impact
Revenue* (US$m)
*Data reflecting 100% of controlled entities as per March 2016, excluding new Letgo investment. Historic numbers adjusted on a pro-forma basis for the increased investment in Avito.The annual revenue growth in FY16 excluding Avito was 34%.
9% (31%)
41% (91%)
FY15 FY16
11%
Classifieds: building leading platforms
Classifieds: continue to monetise and extend current positions
30
Naspers positions (number of countries)
16
2
12
25 5
21
63 3
24
8
1
5
25
9
1
5
24
10
Entering Fighting Leading Leading and monetising
2014 1HFY15 2HFY15 1HFY16 2HFY16
Monthly unique listers (m)*
1216
Mar 15 Mar 16
Net new listings (daily, m)*
1.3 1.8
Mar 15 Mar 16
34% 38%
*Reflects associates and joint-ventures on a proportionate basis based on economic interest as per March 2016.
Classifieds: ramping monetisation in Poland
31
Format Brand
Horizontal
Vehicles
Real estate
Revenue (PLN per internet user)
+75%
1.6
1.9
2.8
3.4
H1 H2
FY15 FY16
+79%
2.22.5
3.3
4.4
H1 H2FY15 FY16
Classifieds: ramping monetisation in Russia
32
Monthly unique listers (m)
+52%
+78%
Revenue (RUBb) EBITDA (RUBb)
Revenue split
24%
Note: FY16 Revenue/Internet User = RUB75 Note: FY16 EBITDA/Internet User = RUB32
3.44.2
Mar 15 Mar 16
59% 53%
34%27%
1% 15%6% 5%
FY 15 FY 16
Shop fees
Listing fees
Advertising
Value-added services
1.31.1
1.8 2.0
H1 H2FY15 FY16
+40% +84%
6.3
6.8
10.1
11.1
13.0
13.9
14.3
15.1
15.7
18.2
Guatemala
Peru
Colombia
Argentina
El Salvador
Panama
Brazil
Ecuador
Costa Rica
Uruguay
Classifieds: Latam is maturing
33
March 2016March 2015
Poland Sep 201317.1
Poland March 201628.8
Maturity index*
*Monthly unique listers per 1,000 middle and high income capita.
Sources: OLX DWH, Worldbank
Classifieds: Strong in C2C versus competition in India
34
Jan 16 Feb 16 Mar 16 Jan 16 Feb 16 Mar 16
People recall OLX more People engage more with OLXPeople visit OLX more often
6.1x
Jan 16 Feb 16 Mar 16
4.5x 2.3xDA
U
Act
ive
Ap
p U
sers
Go
ogl
e Tr
end
s
Vehicles Mobiles Other Goods Real Estate Jobs & Services
OLX QUIKR
6.3x 9.0x 3.6x 1.6x 0.3x
Dai
ly U
niq
ue
List
ers
OLX has more sellers in C2C categories, Quikr has more sellers in B2C categories
OLX OLX
OLX
QuikrQuikr
Quikr
Source: Google Trends Source: SimilarWeb Source: SimilarWeb
Source: Listers with live ads on OLX and Quikr as per March 2016
Classifieds: letgo grows and merges with Wallapop in the US
35
55K
20K
40K
60K
W1 W4 W7 W10 W13
1M
400K
800K
1M
W1 W4 W7 W10 W13
Daily listers
Daily messages
+339%
+617%
Daily products sold (USA)
Key terms• letgo maintains equity &
board control of JV• JV will have letgo brand,
team and technology• Merger is subject to
completion in FY17
Key Benefits• Faster path to market
leadership• Sharing of best practices
with 3.5 year old player • Potential of user base
migration
+
Daily listings
127K
40K
80K
120K
160K
W1 W4 W7 W10 W13
38K
10K
20K
30K
40K
W1 W4 W7 W10 W13
+377%
+301%
Daily transactions
Source: Letgo database
Listed internet: Tencent delivers another strong performance
36
Tencent operating profit (RMBm)
13,211
17,053
20,496
30,411
41,764
2011 2012 2013 2014 2015
CAGR +33%
Revenue mix FY15*
Value-added services (78%)
Online advertising (17%)
Other (5%)
Monthly active user accounts (m): Weixin & WeChat
549762
1Q15 1Q16
39%
*Reflects 100% of Jan-Dec 2015 (FY15) results on a non-GAAP basis; detailed results available at www.tencent.com. FY16 US$/RMB6.449(6.201)
*Revenue from ecommerce transactions has been included in “Other” since 1Q15. This amounted to RMB0.6bn in FY15.
Listed internet: Mail.ru navigating a challenging environment
37
Mail.ru EBITDA (RUBm)
8,381
11,535
15,087
16,850
18,123
2011 2012 2013 2014 2015
CAGR +21%
Revenue mix FY15*
Online advertising (40%)
Community IVAS (34%)
MMO Games (25%)
Other (1%)
Monthly active users (m)
78 82
Dec 14 Dec 15
4%
*Reflects 100% of FY15 aggregate segment performance as reported. For IFRS results with full disclosure refer to www.corp.mail.ru FY16 US$/RUR66.999 (58.176)
Source: comScore
INTERNET
VE: Significant scale across 50 African countries
39
“A world of entertainment, anywhere, anytime”
DTH DTT SVOD OTHER
Our Businesses
VE: Significant scale across 50 African countries
40
Video entertainment subscriber homes (‘000)
3,981 4,451
5,008 5,406 5,732
1,607
1,911
2,234
2,563 2,275
23
377
817
2,256 2,404
FY12 FY13 FY14 FY15 FY16
SA DTH SSA DTH SSA DTT
2%
Change in subscriber mix
50% 50%
27% 30%
23% 20%
FY15 FY16
Premium Compact Lower-end
VE: impact of currency devaluations on the business
41
YoY currency declines
-52%
-33%
-25%
-14% -10%
Zambia Angola South Africa Nigeria Kenya
Weighted average decline YoY -24%
Subscription revenue (US$m)
US$ FX Cover US$m ZAR rate
12 months out 351 13.78
24 months out 87 16.82
EUR FX Cover EURm ZAR rate
12 months out 32 18.13
Hedging policy
• Cover between 80% - 100% of net SA exposure• Cover between 12 – 24 months forward
*Based on monthly Naspers average closing rates.**Average for the 5 countries weighted on subscription revenue for 2016.
22
3,075
FY15 Subscribervolume
Subscriptionprices
Forex FY16
2,783
264
(578)9%
VE: strong economic headwinds hit DTH sub-Saharan Africa
42
SSA net additions (‘000)
SSA ARPU (US$)
36 32
FY15 FY16
11%
SSA DTH operating cash flow and capex (US$m)
219
89 (11)
(19) (16)(19)
FY14 FY15 FY16
Capex
Operating cash flow
78
225
108
215
121
208
(321)
33
1H13 2H13 1H14 2H14 1H15 2H15 1H16 2H16
average
SSA net additions (‘000)
VE: DTT continue to scale, approaching break-even
43
23
377
817
2,256
2,404
FY12
FY13
FY14
FY15
FY16
Total DTT spend (US$m)
128
190
47
163
66 24
FY14 FY15 FY16
Development spend Capex
Subscribers (m)
64%75%
VE: DTH South Africa holding up better, for now
44
187
283 248
309
166
232
156 169
1H13 2H13 1H14 2H14 1H15 2H15 1H16 2H16
SA net additions (‘000)
337 344
FY15 FY16
SA ARPU (ZAR) PVR’s (‘000)
1,067
1,180
FY15 FY16
11%2%
29
24
FY15 FY16
SA ARPU (US$)
average
17%
OUTLOOK
FY17 Outlook: continue building our platforms
46
LEAD IN ECOMMERCE
TARGET HIGH-GROWTH
BUSINESS MODELSPURSUE SCALE
TRANSFORM FURTHER INTO
MOBILE
OPTIMISE RETURNS
Mobile first or only across the business
App activity as primary operating
metric
Reduce development spend in existing
footprintImprove unit
economics in B2C
Pursue further scale in classifieds, food
and B2CReturn to growth in
SSA DTH
Classifieds, B2C, Fintech and O2OConnected video
entertainmentNew segments
Build strong global or regional ecommerce
leaders
OUTLOOK
Glossary of terms
48
— ARPU: Average Revenue Per User
— B2C: Business to Consumer
— C2C: Consumer to Consumer
— CAGR: Cumulative Annual Growth Rate
— DPS: Dividend per Share
— DTH: Direct-to-Home
— DTT: Digital Terrestrial Television
— EPS: Earnings per Share
— FCF: Free Cash Flow
— GMV: Gross Merchandise Value
— HEPS: Headline Earnings per Share
— IVAS: Internet Value-Added Service
— M&A: Mergers and Acquisitions
— O2O: Online to Offline
— OTA: Online Travel Agent
— PVR: Personal Video Recorder
— ROI: Return on Investment
— SSA: Sub-Saharan Africa
— SVOD: Subscription Video-On-Demand
— TPV: Total Payment Value
— VE: Video Entertainment