Naspers : supplementary presentation, Sep20

Naspers Limited

Financial results for the six months ended 30 September 2020

Important information

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 uncertainties, many of which are beyond our control and all of which are based on our current beliefs and expectations about future events. Forward-looking statements are typically identified by the use of forward-looking terminology such as "believes", "expects", "may", "will", "could", should", "intends", "estimates", "plans", "assumes" or "anticipates", or the negative thereof, or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties.

These forward-looking statements and other statements contained in this report regarding matters that are not historical facts involve predictions. No assurance can be given that such future results will be achieved. Actual events or results may differ materially as a result of risks and uncertainties facing us and our subsidiaries. Such risks and uncertainties could cause actual results to vary materially from the future results indicated, expressed or implied in such forward-looking statements.

There are a number of factors that could affect our future operations and could cause those results to differ materially from those expressed in the forward-looking statements including (without limitation): (a) changes to IFRS and associated interpretations, applications and practices as they apply to past, present and future periods; (b) ongoing and future acquisitions, changes to domestic and international business and market conditions such as exchange rate and interest rate movements; (c) changes in domestic and international regulatory and legislative environments; (d) changes to domestic and international operational, social, economic and political conditions; (f) labour disruptions and industrial action; and (g) the effects of both current and future litigation.

The forward-looking statements contained in the report speak only as of the date of the report. We are not under any obligation to (and expressly disclaim any such obligation to) revise or update any forward-looking statements to reflect events or circumstances after the date of the report or to reflect the occurrence of unanticipated events. We cannot give any assurance that forward-looking statements will prove correct and investors are cautioned not to place undue reliance on any forward-looking statements.

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STRATEGIC AND BUSINESS UPDATE

We are investing in the group's strong internet portfolio

Transaction Structure

Rationale

Increased financial flexibility

free float

27.5% US$5bn

72.5%

1

allows investment across asset

US$1.4bn

cash

cash

US$3.6bn

cash

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portfolio and stock

A further step to create value for shareholders

Repurchase Programme of

Prosus N shares

• Prosus shares will be cancelled
• Executed in an optimal manner that can comfortably be done in the market

Purchase Naspers N

shares

• Prosus intends not to exercise voting rights
• Shares will be held in treasury and excluded from per share metrics

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4

Good use of capital - investment

in the group's strong internet

portfolio at a discount

Benefits the shareholders of

Prosus and Naspers

Repurchase Programme to be launched following interim results

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Sustainable leadership positions

International

South Africa

#1 in South Africa

$150bn

Market capitalisation1

#1 in South Africa

Largest Consumer Internet Company in Europe

1 Source: Bloomberg, priced at 30 September 2020

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Prosus: Businesses and investments have benefited from customer shift towards online services

Accelerated financial performance

+32%	+51%
YoY Group	YoY Ecommerce
revenue growth1	revenue growth 1

Diversified & global portfolio benefiting

from accelerated adoption of online business models

Businesses growing throughout the pandemic

Food Delivery

Payments & Fintech

Edtech

+43%

Etail

Social & Internet Platforms

YoY Trading

profit growth 1

Businesses impacted by lockdowns, but now recovering steadily

Classifieds

Food Delivery

1 Reported on an economic-interest basis, i.e. equity-accounted investments are proportionately consolidated. Percentages represent year-on-year growth in local currency, excluding M&A.

Percentage represents year-on-year growth in local currency.	6

Takealot: Strong performance despite restricted operating during Covid-19 lockdowns in Q1

GeneralFashion

Food delivery

Logistics

#1 ecommerce retailer in South Africa

Platform GMV grew by 88%

Mr D GMV grew by >100% each month since May 20202

GMV (US$m)1

56% (85%)

407

262

1HFY201HFY21

Trading loss (US$m)1

(22)(14)

36% (27%)

1HFY201HFY21

1 Numbers in brackets represent year-on-year growth in local currency.

2 KPI's for the period ended September 2020.	7

Media24: Print media impacted by lockdown restrictions, transition to digital media & paywalls to drive growth

Online news

Newspapers

MagazinesPublishers

SA's leading media Company

22.2m average monthly unique browsers on digital platforms

Paywall services:

• News24 recorded ~20k subscribers in 2 months
• Netwerk24 recorded 72k subscribers

Revenue (US$m)1

-40%(-30%)

139

84

1HFY201HFY21

Trading profit/(loss) (US$m)1

-US$20m

4

(16)

1HFY201HFY21

1 Numbers in brackets represent year-on-year growth in local currency.

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Building South Africa's tech ecosystem

R1.4 billion

South Africa-focused funding vehicle that invests in commercially viable, early-stage technology companies that address societal needs

• Solid investment pipeline
• 3 deals finalised funded since 2019 launch
• Current investments in online cleaning services marketplace,
  Agritech and Foodtech
• Fabian Whate appointed head of the unit in March 2020

B2B marketplace that integrates ordering systems of

manufacturers, distributors, and buyers of food products such as

restaurants, hotels and retailers

Subscription-based AI company that provides intelligent tools for

the agricultural industry to manage crops

Online home cleaning services marketplace, connecting clients

to vetted home cleaners

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Contributing to the growth of tech skills in South Africa

Our flagship social impact programme designed to

transform and launch South Africa's unemployed youth

into economic activity

• Started in 2019 with 4 Labs opened to date
• Invested R69m to date
• Invested in a local learning partner to deliver virtual classroom training in digital skills
• Virtually delivering Digital Skills Programme pilot to 100 youths
• Donated R220k to food security initiatives for Alexandra, Khayelitsha, Philippi and Delft communities
• Committed R200k cash donations to local NGOs in Alexandra and Khayelitsha

New Programme Launch 2021:

Accelerate the training of young South Africans to become first

in line for high value tech careers

How will we measure success?

• 200 young people in programme in next 12 months
• 80% successfully completed digital training course with accredited qualification
• At least half in tech jobs within 4 months after completion of the course
• 25% of job placements at Naspers portfolio companies
• All Naspers Labs courses will be accredited through
  MICTSETA

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Supporting our people and South Africa during Covid-19

Prioritizing safety of employees with remote working where

possible and protective measures for our customer facing teams

R1bn in PPE to frontline healthcare workers

R500m to country's Solidarity Fund

Part of B4SA's Pay SMMEs in 30 days drive to support economic

recovery

Contributed R1m to the National Solidarity Response Fund of SA and

R765k to the Botswana relief fund

Provided seed funding of R500k for the Eat Out Restaurant Relief Fund, to support a feeding scheme run by the restaurant industry

Safety of all employees prioritised with remote working

where possible and enhanced protective measures and

safe transport for warehouse employees

Fund established for drivers affected by Covid-19

Played a key role in the distribution of the PPE

contributed by Naspers

Reskilling teams to deliver programme virtually

Naspers Labs donated 2k PPE units to communities

Provided portable workstations and reliable internet connection to Labs field workers to enable remote working

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FINANCIAL REVIEW

Naspers Summary of Financials

1

Strong revenue growth and improved profitability from Prosus

Summary financials (US$bn)1

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Strong growth by Takealot with 8p.p margin improvement

Media24 print business significantly impacted by the pandemic, but strong growth in digital offering

Revenue2

27% (32%)

10,2	13,0

1HFY20 1HFY21

Trading profit2

38% (42%)

1,9	2,6

1HFY20 1HFY21

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Core HE impacted by creation of free-float from capitalisation issue when listing Prosus

Core HE

	-6% (+27%)
1,7	1,6
1HFY20	1HFY21

Free cash flow

	0,3
0,0
1HFY20	1HFY21

1. Summary financials from continuing operations. Numbers in brackets represent year-on-year growth in local currency, excluding M&A.
2. Results reported on an economic-interest basis, i.e. equity-accounted investments are proportionately consolidated.

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Composition of the Naspers Group

	Revenue		EBITDA			Trading profit
	1HFY20	1HFY21		1HFY20	1HFY21			1HFY20	1HFY21
Prosus Group	9 925	12 690	2 327	3 222	1 918	2 664
Takealot
169	238	(16)	(4)	(22)	(14)
Media
139	84	7	(13)	4	(16)
Corporate and other
10	7	(2)	(14)	(4)	(15)
Economic interest
10 243	13 019	2 316	3 191	1 896	2 619
Less: Equity-accounted investments1	(8 513)	(10 522)	(2 458)	(3 278)	(2 098)	(2 772)
Consolidated	1 730	2 497		(142)	(87)			(202)	(153)

1 Includes the associates and joint ventures of the Naspers and Prosus Group.

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Core headline earnings reconciliation

US$m	1HFY20	1HFY21
Headline earnings from continuing operations	1 417	1 730
Equity-settledshare-based payment expenses	275	257
Tax paid on cancellation of shares1	138	-
Amortisation of other intangible assets	173	142
Fair-value adjustments and currency translation differences	(440)	(622)
Retention option expense	8	13
Transaction-related costs	85	20
COVID-19 donations	-	9
Other2	-	7
Core headline earnings from continuing operations	1 656	1 556

1. One-offtaxes related mainly to Security Transfer Tax (STT) on cancellation of the M ordinary shares pursuant to the listing of Prosus
2. Other adjustments relates mainly to the increase in provision related disposals

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Net cash profile

Net cash of US$4.6bn at 30 September 2020

358

5.667		Naspers cash

Prosus cash

Prosus interest bearing debt

9.947

Note: Naspers and Prosus cash includes short-term investments and overdraft.

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Current assets and liabilities

Current assets (US$m)	FY20	1HFY21
Inventory	260	312
Trade receivables	139	150
Other receivables and loans	542	556
Cash/short-term cash investments	8 363	10 309
Assets held for sale	208	74
Total	9 512	11 401

Current liabilities (US$m)	FY20	1HFY21
Current portion of long-term debt	67	89
Trade payables	322	407
Accrued expenses & other current liabilities	1 760	2 298
Bank overdraft	32	4
Liabilities held for sale	26	29
Total	2 207	2 827

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Glossary

-	IRR:	Internal Rate of Return	-	NGO:	Non-Governmental Organization
-	EBITDA:	Earnings before interest tax, depreciation and amortization	-	PPE:	Personal Protective Equipment
-	IPO:	Initial Public Offerings	-	M&A:	Mergers and acquisitions
-	GMV:	Gross merchandise value	-	NAV:	Net asset value
-	IFRS:	International Financial Reporting Standards	-	SA:	South Africa
-	Core HE:	Core headline earnings	-	AI:	Artificial Intelligence
-	IG:	Investment Grade	-	ESG:	Environmental, Social, Governance
-	SMME:	Small, Medium and Micro Enterprise	-	YoY:	Year-on-year
-	JSE:	Johannesburg Stock Exchange	-	3P:	Third-party
-	MICTSETA: Media, Information and Communication Technologies	-	LTIs:	Long Term Incentives
		Sector Education and Training Authority

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Naspers Group portfolio

73%	Local SA assets

97%

85%

			Ecommerce													Social & internet platforms
																	31%
Classifieds	Payments & Fintech			Food delivery		Etail	Ventures
100%1		99%		92%		80%		19%			27%
100%		99%		61%2			42%		15%
39%		72%		21%					21%
38%		90%		40%					44%
91%		99%										11%
			79%										16%
			19%										12%	Organogram depicts effective percentage holdings in major entities at 30
															September 2020 for Prosus where applicable
			23%										21%
												1 OLX owns 50% of operations in Brazil and 66% of Indonesia.
															2	Movile holds 67% of iFood.
													9%
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Contact us

Eoin Ryan

(Head of Investor Relations)

[e-mail]

https://www.naspers.com/

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