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NASPERS LIMITED - Results of AGM

Release Date: 29/08/2014 13:00
Code(s): NPN     PDF:  
Wrap Text
Results of AGM

Naspers Limited
(Incorporated in the Republic of South Africa)
(Registration number 1925/001431/06)
JSE share code: NPN ISIN: ZAE000015889
LSE ADS code: NPSN ISIN: US 6315121003
(“Naspers”)

RESULTS OF ANNUAL GENERAL MEETING

Cape Town, 29 August 2014 – Naspers Limited (“Naspers”) (JSE: NPN, LSE: NPSN), the 100th
annual general meeting (AGM) of Naspers Limited was held this morning, under the
chairmanship of Mr Ton Vosloo, in the Naspers Centre at 40 Heerengracht, Cape Town, South
Africa.

Shareholders approved all the ordinary and special resolutions with the required majority. A
gross dividend of 425c per Naspers N- ordinary and 85c per Naspers A- ordinary share were
approved. PricewaterhouseCoopers was appointed as external auditors, with Mr B Deegan as
the individual who will undertake the audit.

The appointments of Messrs Craig Enenstein, Don Eriksson, Nolo Letele, Roberto Oliveira de
Lima, Yuanhe Ma, Basil Sgourdos, Cobus Stofberg and Bob van Dijk were confirmed.

Prof Rachel Jafta, Prof Debra Meyer and Mr Boetie van Zyl, who retired by rotation, were re-
elected to the board.

Messrs Boetie van Zyl, Ben van der Ross and Adv Fran du Plessis were elected to the audit
committee.

Mr Vosloo reported in his AGM address that Naspers posted a solid performance for the year 31
March 2014. The group’s strategy remained organic growth of existing businesses and limited
acquisitions that add value to the group.

The chairman’s address follows:

Dear shareholders and guests,

This is a very special occasion for the company as it is the 100th annual general meeting since
the company was formed in December 1914 at a meeting designated as a start-up meeting
(stigtingsvergadering).

I do my introduction in English, wishing to point out that the first AGM was held in Dutch, the
other official language of the then Union, and Afrikaans was only recognised as an official
language in 1925.

We have moved on since then and today we herald another step to keep up with the fast-
moving world. Up to now our AGMs were in Afrikaans till fairly recently, when we alternated
between Afrikaans and English.

The company has since last year become fully international when our biggest subsidiary, MIH
Holdings was folded into Naspers. Our board now comprises members from around the globe
and English being the universal business language, it is now the lingua franca of the Board. We
keep a copy of the minutes in Afrikaans for record purposes, and my comments today are
available in Afrikaans.
                                                                                            
I do not wish to give the impression that we are relegating Afrikaans. Our business in South
Africa, especially on the print publishing side and the internet, and in books, is still the biggest
purveyor of Afrikaans, and we uphold the status of the language and do not wish it to be
ignored or sidelined.

Vir my as ’n Afrikaner is dit 'n saak van die hart en ek vertrou die behoud daarvan sal so bly in die
toekoms. For me as Afrikaner Afrikaans is part of my being and I trust its formal and formidable
role in our society will be maintained at all levels.

Looking back over the 99 years of our being, one can say that Naspers has really grown forward
and upwards as a business. From the parochial publisher of 1915, we have now spurted forward
to being the top ten in the internet, with activities in 133 countries. We straddle the globe and I
am very proud that we have jump-started ourselves from our African origins to being a
respected and leading player in our line of business worldwide. Few South African businesses
have successfully made that transition and on behalf of the Board I give full credit to our teams
and its leaders for the accomplishment.

In that regard I wish to congratulate our former team leader Koos Bekker, who is poised to
succeed me as non-executive chair next year when I finally step down in April. Koos is an
inspiring and far-sighted leader. He can see around the next corner and he can spot a curve ball
coming. Naspers' transition has been huge and it started 30 years ago when Koos Bekker came
into my and Naspers' life.

I pay fullsome tribute to Koos and will be handing over the reins of this progressive, fantastic
and wonderful business to him with no qualms.

The Naspers group had a lively year with progress in several businesses. We reported robust
consolidated revenue growth of 26% at R62,7bn, driven by both our internet and pay-television
businesses. This growth was fuelled by development spend that increased 79% on 2013 to
R7,7bn – particularly for ecommerce and digital terrestrial television or DTT.

In line with our goal to invest in new ventures that will deliver value over the long term, we
continued to invest for organic growth and acquire new businesses in our fields of focus. By
investing in this ongoing expansion, core earnings growth was limited to around R8,6bn, similar
to last year.

While aggressively investing for the long term limits short-term earnings and cash flows, we
believe this strategy is sound. Our aim is to deliver value to our shareholders over time and to
contribute to the communities in which we operate.

Our recent performance underscores the soundness of this strategy. Despite the turbulence of
the past five years, Naspers has grown revenues, including our share of associates’ results, at a
compound annual rate of some 25% over this period.

Globally, economic growth was variable over the past year, and each country and business in
our portfolio has its own uncertainties. However, a benefit of operating in multiple countries
and across more than one technology is that the aggregate risk profile is diminished.

The use of internet services continued to expand with the global internet population now
around 3bn – almost half the world’s total population. The growth of mobile devices is an
important trend for the group. In some of our businesses, over 50% of total traffic now comes
from cellphones and tablets.
                                                                                                 
Ecommerce is taking market share from bricks-and-mortar commerce. Technologies such as
mobile apps, location-based services, barcode/product identification and image recognitions,
mobile payments and services will continue to drive ecommerce growth. Over the next decade,
ecommerce is expected to emerge as the largest section of the internet in most countries
around the world.

Our integrated report presents a balanced view of our economic, social, environmental and
governance activities for the year to 31 March 2014. Our intention is to extend Naspers’s core
value of being useful to the communities we serve, while reflecting the key concerns of
stakeholders.

Breaking down our results by segment, our internet units recorded strong growth with this
segment increasing revenues by 65% to R57bn, although higher development spend restricted
trading profit growth to 8% or R6,6bn. Our internet activities are rapidly transforming
themselves into mobile-focused operations. Tencent performed well in a dynamic and highly
competitive Chinese market and, in Russia, Mail.ru reported good results with growth across all
major segments.

Revenues from our ecommerce activities rose 64% to R20,3bn. Given that ecommerce is an area
of expansion, development spend of R5,6bn resulted in the trading loss for this segment
widening to R5,3bn. We recorded strong organic expansion in our online retail operation, but
we are still some way off the appropriate scale. In our online classifieds businesses, we now own
and operate sites in some 40 countries in Eastern Europe, Asia, Africa, Latin America and the
Middle East and on our way to becoming a global leader. Our payments activities continued to
grow while we merged our businesses under a single operating unit and the PayU brand. PayU is
expected to become a meaningful business in coming years. We combined our price-comparison
operations across Latin America, Africa and Central and Eastern Europe into a global unit, with
encouraging growth in revenues.

Our pay-television business reported revenue growth of 20% to R36,3bn. Subscribers rose by
1,3m households, our largest ever, taking the base to over 8m homes across 50 countries in sub-
Saharan Africa. Investments in DTT and online services and local content resulted in trading
profits creeping up at a slower 13% to R8,5bn. DTT coverage expanded and at 31 March now
covered eight countries and 92 cities and is still growing. We continue to invest in our online
offering, expanding our services on mobile phones, tablets and computers and we launched an
improved personal video recorder, the DStv Explora.

Our print media segment had a tough year, with flat revenues and declining margins. Media24
managed revenue growth of 1%, but trading profit declined by 7%. Abril had a poor year, as
revenues declined and restructuring lagged. Our online/mobile media and news efforts have
delivered audience and engagement growth.

Governance and sustainability remain essential measures for our stakeholders. As a
multinational group, we are exposed to different risks in different jurisdictions. Accordingly, the
board conducts the group's business with integrity in all territories, applying appropriate
corporate governance policies and principles.

A disciplined reporting structure ensures the holding company board is informed of subsidiary
activities. Detailed strategies and business plans, covering the financial and non-financial
elements of operations, are regularly reviewed and management remuneration is linked to
performance and strategic objectives.

We continually evaluate areas where governance at corporate and subsidiary level can be
improved. In line with the requirements of the Companies Act, the social and ethics committee
for Naspers and its South African subsidiaries reports to shareholders each year via the
integrated report.

The broader regulatory environment continues to evolve. In Africa, countries are strengthening
broadcasting regulation and new competition legislation is being introduced. Elsewhere in the
world, internet regulation is also increasing. Naspers has the required licences to provide
services, subject to conditions that may change over time. Equally, our newspaper and magazine
businesses are subject to some regulatory impacts. Naspers’s two main South African units,
MultiChoice and Media24, are complying with domestic black economic empowerment
requirements.

In essence, the sustainability of our group is determined by our ability to inform, entertain and
connect people, distribute media products, support ecommerce, sell advertising and develop
related technologies.

In line with our sustainable development policy, the group contributes to local communities in
which it operates. We also strive to minimise our impact on the environment. Some of our more
significant initiatives focus on education, skills development, entrepreneurial spirit, community
outreach and environmental sustainability. Most of these are implemented in partnership with
government, communities or other local organisations.

In the past year, the group paid 31% of the wealth we created to employees, and 27% to local
governments where we have operations. To fund our expansion and growth strategy, we rely on
investors and debt providers, who in turn are compensated by dividends, share price
appreciation and interest payments. This accounts for 12% of total earnings distributed. The
remaining 30% has been reinvested to ensure we maintain a sustainable group that enriches
people’s lives, provides jobs to over 28 000 people (excluding associates and joint ventures) and
contributes to developing the countries in which we operate.

Moving to dividends
The board recommends that the annual gross dividend be increased 10% to 425c (previously
385c) per listed N ordinary share, and 85c (previously 77c) per unlisted A ordinary share. If you
confirm this today, dividends will be payable to shareholders recorded in the books on Friday,
19 September 2014 and paid on Monday, 22 September 2014.

On to directors
During the year, we announced several changes to the board. Our subsidiary MIH Holdings
Proprietary Limited had grown to comprise the vast majority of our market capitalisation and
large overlaps developed between the MIH and Naspers boards. As such, we decided to
reconfigure the Naspers board.

As part of this process, after many years of excellent service, Lourens Jonker, Neil van Heerden
and Lambert Retief and Prof Hein Willemse stepped down. Craig Enenstein, Don Eriksson,
Roberto Oliveira de Lima, Cobus Stofberg, Yuanhe Ma and Nolo Letele were appointed to the
board.

Bob van Dijk, who headed our ecommerce operations, was appointed chief executive of Naspers
in April 2014. With an MSc in econometrics from Erasmus University Rotterdam, and an MBA
from Insead in France, Bob’s extensive international ecommerce experience in our key growth
field is expected to help us become one of the leading global players in this segment.

                                                                                             
In June this year, Steve Pacak, executive director and chief financial officer, retired, but remains
an alternate non-executive director. Basil Sgourdos, formerly CFO of Naspers’s subsidiary MIH,
succeeded him. Steve, fondly known in the group as “Mr Pay Check”, had a distinguished career
and we thank him for his outstanding contribution to the group. Mark Sorour, head of mergers
and acquisitions, was appointed as an alternate director.

Balancing capable, experienced management with fresh talent has long been a hallmark of our
group and we look forward to a seamless transition to our new management team.

Members of the audit committee are Adv Fran du Plessis, Don Eriksson, Ben van der Ross and
Boetie van Zyl. We recommend that you reappoint these individuals as audit committee
members in compliance with the Companies Act.

You will also be asked to elect Prof Rachel Jafta, Prof Debra Meyer and Boetie van Zyl, who retire
by rotation.

Now a few achievements, career moves, retirements and more
Apart from the changes at board level already noted, there were several other notable changes
during the year.

As we expand our ecommerce group we have made several new key appointments. Larry Illg,
head of ecommerce operations, marketplaces and fashion, Peter de Caluwe, CEO payments,
Aileen O’Toole, Naspers head of human resources, Tim Hilpert Classifieds CEO for Europe,
Miguel Mascarenhas, the founder and CEO of Fixeads in Portugal, was promoted to Classifieds
global CTO. Eben Greyling decided to take some time out and we welcome Jim Volkwyn back
into our fold as head of payTV operations.

Nico Marais was promoted general manager finance for the Naspers group.

Retirements included André Coetzee, group legal counsel. Craig Opperman was appointed in his
stead.

Media24 had a number of retirements, many of whom served the company for more than 30
years:
John Relihan, CEO of Media24 Magazines, who served 37 years. Charlene Beukes, currently GM
of Weekly Magazines takes over from John and CEO of Media24 Magazines

Other retirees are:
Alida Potgieter, Publisher Human & Rousseau Fiction
Aldré Lategan, Publisher Children's books at NB Publishers
Tim du Plessis retired after 38 years at Media24 and joined kykNET.

Fred Mouton retired in February 2013 but still comes to the office every day, now working on a
contract basis. In this regard Die Burger has a remarkable record: only 3 cartoonists in the 99
years since the establishment of Naspers and Die Burger in 1915.
Martiens van Bart retired earlier this year, after some 35 years’ service at Die Burger, as a
fearless champion for the preservation of the Cape cultural treasures – buildings, artefacts and
documents alike.

Anthony Stidolph: The Witness’s political cartoonist – and the first person to hold such a
position in the paper’s nearly 170-year history, is nearing retirement next month after a career
spanning nearly 30 years at the paper.

                                                                                                  
We are saddened by the passing of one of our most illustrious former directors, Jeff Malherbe
and Prof Russel Botman, Media24 Director and Rector and Vice Chancellor of Stellenbosch
University; Lappies Labuschagne erstwhile CEO of Tafelberg-Uitgewers died of cancer earlier
this year and also Ronnie van Wyk, one of the founders of M-Net.

The future for Naspers
Looking forward, our established businesses should in the aggregate remain cash flow positive,
profitable and growing.

As noted, our goal is to invest in new ventures that will deliver value over the long term. With
this in mind, we will continue to invest for organic growth and may also acquire new businesses
in our selected fields.

We believe that, through a combination of attractive markets and appealing customer product
offerings such as online classifieds, etail and DTT, we have a realistic prospect for growth over
the medium term.

Shareholders, I have been the custodian of Naspers in my role as chair for 22 years. It has been
quite an innings, rollicking at times, even hair-raising, never dull, and I trust you as shareholders
appreciate the value that has been unlocked.

Thank you for your sterling support, especially in the sometimes trying times when things did
not run according to expectations.

I specially wish to thank our very able, diligent and strict disciplinarian of a Group Secretary,
Gillian Kisbey-Green for guiding me at all levels to bring matters to a satisfactory conclusion.

It has been a great privilege, and I have been enriched by the lifetime experience of being
involved with Naspers For that I thank you as shareholders and my fellow and succeeding board
members through the years for the opportunity.

I thank you.

Contact:
Meloy Horn
Head of investor relations
Naspers
+27 11 289 3320
+27 82 772 7123
meloy.horn@naspers.com

Cape Town
29 August 2014

Sponsor: Investec Bank Ltd

Important Information:
The report may contain 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 judgements 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 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, as a result of new information, future events or otherwise. Investors are cautioned
not to place undue reliance on any forward-looking statements in this report.
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