Naspers : Summarised consolidated financial statements (PDF)

Summarised consolidated

financial statements

for the year ended 31 March 2021

including notice of virtual annual general

meeting and power of attorney

Improving everyday

life for millions of

people…

Letter to shareholders...........................................................................................	1
Commentary.............................................................................................................	2
Financial
Summarised consolidated income statement.............................................	15
Summarised consolidated statement of comprehensive income..........	16
Summarised consolidated statement of financial position......................	17
Summarised consolidated statement of changes in equity.....................	18
Summarised consolidated statement of cash flows ..................................	22
Notes to the summarised consolidated financial statements.................	23
Independent auditor's report on the summarised
consolidated financial statements..................................................................	53
Other information to the summarised consolidated
financial statements............................................................................................	54
Report on the assurance engagement on the compilation
of pro forma financial information..................................................................	62
Notice of annual general meeting
Notice of virtual annual general meeting.....................................................	65
Form of proxy........................................................................................................	77
Notes to the form of proxy................................................................................	79
Form to be completed by shareholders who wish to participate
electronically.........................................................................................................	81
Information
Administration and corporate information....................................................	83

Naspers summarised consolidated financial statements for the year ended 31 March 2021

Letter to shareholders

Dear Shareholder

This summary of our results for the year to 31 March 2021 also includes an executive review of our performance as published on 21 June 2021 in the report on the stock exchange news services (SENS), on our website at www.naspers.com, and in major daily newspapers in South Africa.

The notice of the virtual annual general meeting, form of proxy and other administrative information form part of this summarised report.

The integrated annual report and detailed remuneration and governance reports will be available on our website at www.naspers.com on or about 21 June 2021. The annual financial statements were published on our website on 21 June 2021.

We believe that this approach to reporting confirms our commitment to protecting the environment where we can while we grow our business in a sustainable manner.

Thank you for your support.

Koos Bekker

Chair

19 June 2021

Naspers summarised consolidated financial statements for the year ended 31 March 2021

1

Commentary

Our board is immensely proud of what our people achieved during the past year. They managed the pandemic, delivered powerful revenue growth and lifted profitability. Foundations were laid for future growth.

The year ended 31 March 2021 (FY21) was an extraordinary period. Despite the challenges, the group has delivered strong results across its portfolio and made good progress against its strategy. Group revenue, measured on an economic-interest basis, grew 34% (32%) to US$29.6bn, a meaningful acceleration of 17pp (9pp) on the same period last year. Group trading profit grew 49% (45%) to US$5.6bn.

Seven years ago, we set out a strategy to build valuable, global consumer internet businesses. We focus on high-growth markets, where our platforms can provide useful products and services for millions of people in their everyday lives. In recent years, we have deliberately repositioned the group for an increasingly online world and invested effectively to accelerate growth and deliver good returns across our portfolio.

Over the past 12 months, this strategy and the momentum we have built has paid off. The group has benefited from its online focus, its global reach, diversified operations and strong financial footing. Our teams have also adapted well to the changing operating environment.

This has meant we have been well placed to effectively respond to the world's increased demand for online products and services which has been triggered by Covid-19. Our businesses across online classifieds, food delivery, payments and finance technology, education technology and online retail have continued to serve and support their customers and communities. We have also identified promising adjacencies for our existing

businesses as well as new business models through our global Ventures team.

In FY21 our businesses grew stronger building on the momentum they had at the end of the previous year. For some businesses, there was initial adverse impact in the face of early lockdowns and restrictions. We adapted quickly, and as restrictions eased and the pandemic drove more people online, we were ready to meet heightened consumer demand with products and services that helped people and their communities through difficult times. At a local level, we also provided additional support to our people, partners, customers, communities and in some cases, governments, to help our stakeholders respond to Covid-19. Separately, we enhanced our commitment to environmental and social issues, and we are carbon neutral as a group, having offset our emissions for the past financial year.

During the period, we accelerated revenue growth, improved profitability and cash generation, and grew customer numbers. All core ecommerce segments made progress against their financial and strategic objectives. Classifieds performed well under tough circumstances and recovered in the second half, regaining financial and operational momentum by focusing on continued innovation with products that support users along their transaction journey. Food Delivery and Etail performed exceptionally well as customers shifted from offline to online. After an initial drop in volumes in India as the country entered lockdown, our Payments and Fintech business rebounded, reflected in accelerating volumes. Finally, our investments in Edtech began to bear fruit, driven by increased adoption by students working from home.

Tencent recorded another strong financial performance. We believe it remains very well positioned for growth. We remain committed long-term investors in Tencent.

2 Naspers summarised consolidated financial statements for the year ended 31 March 2021

Commentary (continued)

We are focused on building further value across our businesses and see significant upside in some new opportunities in which we have invested. Notably, in adding the autos transaction businesses to our Classifieds operations, a broader on-demand delivery ecosystem in our Food Delivery segment, expanding into digital banking in Payments and Fintech, and in the promising new segment of Edtech, which will be reported on from 1 April 2021.

Over the years, we have increased our financial flexibility, allowing the group to pursue its growth objectives. This has enabled us to invest in expansion and in ourselves. To illustrate this, we announced a US$5bn share-purchase programme of Naspers and Prosus stock. This was implemented through on-market acquisitions of US$1.4bn Prosus N ordinary shares, completed in February 2021. In addition US$3.6bn Naspers N ordinary shares, which will be completed by the end of June 2021.

Prosus voluntary share exchange offer to Naspers shareholders

On 12 May 2021, Prosus announced a voluntary share-exchange offer to acquire 45.4% of Naspers shares. We believe this is a useful step in unlocking value for both Naspers and Prosus shareholders by reducing Naspers's outsized weighting on the Johannesburg stock exchange (JSE). It will also help Prosus in more than doubling its free float on the stock markets to 59.7%. Naspers shareholders will derive immediate value accretion from exchanging their shares into the lesser-discounted Prosus shares. This value should compound at a lower discount over time as Prosus's value grows. Naspers shareholders should also benefit from net asset value (NAV) accretion at the Prosus level. Importantly, while we are resizing Naspers on the JSE for the long term, it remains the largest company in South Africa by market capitalisation. For Prosus shareholders, buying Naspers shares at a higher discount will be NAV accretive, as Prosus will buy high-discount

shares with lower-discount shares. The transaction should unlock billions of dollars of value and assist future value creation. Further, it directly addresses a driver of Naspers's discount by almost halving its index weighting, while remaining South Africa's most valuable company on the JSE. In addition, it improves Prosus's investment profile, increasing its free float's economic exposure to NAV by over 100%. It is backed by a US$5bn buyback to support the transaction and stimulate orderly trading. The transaction is expected to close in the third quarter of 2021. For further details, please go to www.share-exchange-offer.com.

Given the wide geographical span of our operations, as well as significant mergers and acquisitions (M&A) in Ecommerce, reported earnings are materially impacted by foreign exchange movements and the effects of acquisitions and disposals. Where relevant in this report, we have adjusted for these effects. These adjustments (pro-forma financial information) are quoted in brackets after the equivalent metrics reported under International Financial Reporting Standards (IFRS). A reconciliation of pro forma financial information to the equivalent IFRS metrics is provided in the 'Other information - Non-IFRS financial measures and alternative performance measures' of these summarised consolidated financial statements.

FINANCIAL REVIEW

The group delivered strong results for the year ended 31 March 2021. Group revenue, measured on an economic-interest basis of US$29.6bn, was driven by Ecommerce revenues which grew 46% (55%) year on year, and Tencent which grew 32%

(28%) year on year. Group trading profit grew 49%

(45%) to US$5.6bn. Aggregated trading losses in our Ecommerce segments reduced by 47% (49%) or US$384m to US$439m. Trading profit of our profitable ecommerce businesses grew by 44%

Naspers summarised consolidated financial statements for the year ended 31 March 2021

3