Wrap Text
Summarised consolidated financial results for the year ended 31 March 2016
Naspers Limited
Incorporated in the Republic of South Africa
(Registration number 1925/001431/06)
(Naspers)
JSE share code: NPN ISIN: ZAE000015889
LSE share code: NPSN ISIN: US 6315121003
Summarised consolidated
financial results for the year
ended 31 March
2016
COMMENTARY
Naspers delivered a satisfactory performance. Core
headline earnings (which the board regards as the best
indicator of sustainable earnings) grew 21% to US$1.2bn.
Consolidated development spend reduced 14% to US$708m.
The internet segment continued to expand. Improved
competitive positions and scale provide a foundation
for sustainable future returns. The video-entertainment
segment, however, bore the brunt of a sharp fall in
commodity prices, which weakened both African currencies
and consumer sentiment.
In the internet segment Tencent again shone on the back
of healthy mobile engagement. In classifieds, monetisation
plans are on track and resulted in a reduction in trading
losses for the core portfolio (excluding new markets,
primarily through the mobile app-only classifieds platform,
letgo). Avito is delivering ahead of plan. In etail, eMAG
expanded with improved operating leverage. Equity-
accounted etail investments Flipkart and Souq invested
more than prior years to drive revenues and improve product
offerings. PayU made progress in its payment service
provider (PSP) business, as it consolidated technology and
drove efficiencies which, in turn, reduced operating losses.
ibibo's air business turned profitable and we boosted our
investment to build a leadership position in the hotels
segment in India. In LatAm, Movile's mobile food-ordering
platform, iFood, expanded and consolidated its leadership.
In the video-entertainment segment, the South African
customer base grew by 325 000 homes despite a tough
economy. However, recently the South African rand
(SA rand) has weakened substantially and a weak
macroeconomic outlook could reduce growth and
profitability. This segment earns revenues in local currency
while incurring a major portion of costs (content and
transponder capacity) in United States dollar (US dollar).
When local currencies weaken, both margins and financial
performance thus suffer. In sub-Saharan Africa, we implemented
substantial price increases, given the large US dollar cost base
and weakening currencies. This combination of higher prices and
weaker consumer sentiment resulted in a loss of 288 000
direct-to-home (DTH) customers. To reinvigorate growth,
the focus is now on managing costs, minimising further
price increases to the consumer and strengthening content
in the mid and lower segments. The digital terrestrial
television (DTT) customer base reached 2.4m homes at year-end,
and development spend has declined. Our new subscription
video-on-demand service, ShowMax, recorded a good start in
South Africa with a deeper and more customised content
offering than competitors and a focus on service delivery.
The media segment (previously print) faced the negative
effect of structural and macroeconomic challenges on
revenue. The focus on cost containment has, however,
enabled Media24 to improve profitability while investing
further in digital and ecommerce initiatives.
As announced on 18 April 2016 and in view of the
growing international spread of its business, the group
has changed its presentation currency for financial
reporting purposes from SA rand to US dollar. In these
consolidated numbers the financial performances of our
businesses were consolidated in their respective functional
currencies and translated to US dollar. The weakness
in emerging-market currencies over the past year
means year-on-year performance was dampened by the
translation impact. Unlike the severe earnings impact of
falling currencies on the video-entertainment segment,
in ecommerce this impact is less of a concern given the
group's diverse geographic spread, plus the fact that costs
are also usually incurred in local currencies.
Where relevant in this report, we have adjusted amounts
and percentages for the effects of foreign currency and
acquisitions and disposals. Such adjustments (pro forma
financial information) are quoted in brackets after the
equivalent metrics reported under International Financial
Reporting Standards (IFRS).
The following financial commentary and segmental review
has been prepared on an economic-interest basis, including
consolidated subsidiaries and a proportionate consolidation
of associated companies and joint ventures.
FINANCIAL REVIEW
Revenues grew 6% (22%) to US$12.2bn, driven by growth
from Tencent and from ecommerce on the back of revenue
growth in classifieds, travel and etail. Consolidated
revenues were US$5.9bn – down 10% year on year –
primarily due to the impact of currency translation.
Excluding currency translation, as well as the impact
of acquisitions and disposals, consolidated revenues
improved 11%.
Development spend, measured on an economic-interest
basis, was stable at US$961m, while consolidated
development spend reduced 14% to US$708m. Classifieds
development spend, excluding investment in new markets
through letgo, declined by a meaningful US$59m, DTT
development spend in the video-entertainment segment
reduced US$143m and consolidated etail platforms
development spend dropped US$26m, as all three
businesses continued to increase monetisation and scale.
New areas of investment include: ibibo's hotels offering;
building new classifieds markets (primarily the US) via the
mobile app-only letgo platform; ShowMax; and developing
consumer-facing offerings in PayU. Together these
accounted for development spend of US$192m. Losses
in our equity-accounted etail investments widened by
US$68m as they build their platforms and grow revenues
to outpace competition.
Trading profit increased 18% (38%) to US$2.2bn, driven
by expansion of 39% (43%) in the group's share of
Tencent's trading profit. Lower losses in classifieds and
DTT, combined with ibibo's air-travel business turning
profitable and a reduction in PayU's PSP losses as it
scales, also boosted growth. These positives were offset
by new investments discussed above and a decline in video
entertainment's profitability. With significant US dollar
costs, local currency revenues and a loss in sub-Saharan
DTH customers, trading profit in the video-entertainment
segment declined 17%.
IFRS operating profit declined from a positive US$161m to
a negative US$177m in the current year, mainly due to the
effects of currency weakness in the video-entertainment
segment and impairments, as discussed below.
The group's share of equity-accounted results was
13% lower at US$1.3bn, largely due to one-off gains of
US$498m in the prior-year figure. In the current year the
group's share of equity-accounted earnings includes one-off
gains of US$251m and impairment losses of US$180m
recognised by our associates and joint ventures. The
contribution to core headline earnings by equity-accounted
investments, adjusted for these capital items, was up 25%
to US$1.6bn.
The group recognised impairment losses of US$251m
during the year, including US$53m relating to Nigerian
equity-accounted etail investment, Konga. As reported in
the first half, the group wrote off US$140m on its Brazilian
online comparison shopping (OCS) business, Buscapé,
which faced headwinds. As announced in February 2016,
the group waived the preference share debt owed by
Welkom Yizani Investments, the largest black economic
empowerment structure in the South African print-media
industry. This gave rise to an impairment of US$29m.
The group's Czech etail and ecommerce business, Netretail,
and OCS platform, Heureka, were classified as held for sale
on 30 September 2015. At year-end, the group recognised
a writedown to fair value less costs of disposal of US$88m
for Netretail. The sale of these businesses was subject
to regulatory approval as at 31 March 2016. Subsequent
to year-end, approval was received for the Heureka sale
and we consequently recognised a gain on disposal of
approximately US$61m.
Net interest expense on borrowings rose 19% to US$170m
due to increased interest obligations after the US$1.2bn
bond issued in July 2015.
Core headline earnings increased by 21% (49%) to US$1.2bn
on the back of Tencent's contribution.
Consolidated free cash outflow of US$38m was recorded,
marginally higher year on year. Lower capital expenditure
in the video-entertainment business, a US$118m reduction
in development spend and higher dividends from associates
were offset by weaker cash flow from the sub-Saharan
Africa video-entertainment business.
Following the US$2.5bn equity raise in December 2015,
consolidated net gearing dropped to 12%. Some US$1.2bn
of the proceeds was used for the acquisition of a controlling
stake in Avito.
The company's external auditor has not audited, reviewed
or reported on any forecasts in these summarised
consolidated financial results.
SEGMENTAL REVIEW
Internet
The internet segment benefited from good growth in
Tencent and ecommerce to deliver revenues of US$8.2bn,
up 18% (31%) year on year. Trading profit was 38% higher
year on year at US$1.6bn.
Tencent
For the year ended 31 December 2015, Tencent revenues
were RMB102.9bn, up 30% annually. Non-GAAP profit
attributable to shareholders (Tencent's measure of
normalised performance) grew by 31% to RMB32.4bn.
Strong mobile engagement is at the core of Tencent's
continued growth. Weixin monthly active users increased
39% year on year to 697m, while mobile games and online
advertising revenues were up 53% and 110% respectively,
with mobile accounting for 65% of total advertising
revenues. The rapid adoption of Tencent's mobile wallet
has come at some cost because of subsidising bank fees.
Tencent recorded expansion of services embedded in Weixin
as use of Weixin Pay grew, as well as from services provided
by online and offline partners. Enhancements to premium
content provided via subscription services such as video and
music, boosted QQ subscription services and drove a 30%
year-on-year increase in social network revenues.
Excellent leadership, continued investment and innovation,
together with building strategic partnerships across
its businesses, position Tencent well for the long term.
More information on Tencent's results is available at
www.tencent.com/en-us/ir.
Mail.ru
Mail.ru's revenue for the year ended December 2015 was
up 11% to RUB36.3bn. Group aggregate segment EBITDA
– Mail.ru's measure of normalised performance – was 8%
higher at RUB18.1bn.
Improved monetisation in VKontakte and expansion of
targeted advertising were key drivers. A weaker rouble and
higher share-based compensation expenditure drove the
decline in aggregate net profit. More information on Mail.ru's
results is available at https://corp.mail.ru/en/investors/.
Ecommerce
This segment recorded a bright year. Revenue grew 6%
(24%) to US$2.6bn. The general decline in emerging-market
currencies versus the US dollar had a significant impact on
translating the segment's performance into US dollars.
The ecommerce business model relies on the continued
success of existing businesses and on integrating new
acquisitions. Continued investment to drive growth and
innovation, develop new markets and deliver superior
customer experiences resulted in development spend of
US$854m and a trading loss of US$693m.
Progress was made in the classifieds unit, which generated
strong revenue growth of 35% (46%). Naspers has
demonstrated its ability to outperform direct competitors
and gained share in India, Argentina and other markets.
Performance indicators in most businesses are trending
ahead of expectations.
We continue to invest in long-term growth opportunities,
as evidenced by an additional US$1.2bn for a controlling
stake in Avito in December 2015. Given the evolution
towards mobile, we spent US$100m on a controlling interest
in letgo, a contemporary app-only product, allowing us to
pursue new markets such as the US. The consolidation with
Wallapop in the US subsequent to year-end will give letgo
increased scale. The existing classifieds businesses have
solid mobile positions, with listings primarily from mobile
devices.
Marketplaces continued to deliver stable revenue, positive
margins (39%) and surplus cash flow (US$104m). The focus
remains on the mobile experience, expanding products
and services, and extending consumer reach. The most
recognised brand in Polish ecommerce, Allegro, has grown
from a consumer-to-consumer (C2C) marketplace to a
predominantly business-to-consumer (B2C) third-party
(3P) marketplace, and is now transitioning to a structured
marketplace that includes first-party (1P) sellers as well.
The group concluded the sale of its Swiss marketplace business,
the Ricardo group, in September 2015 with proceeds of
CHF240m.
Etail grew revenue by 12% (27%) and remains a driver
of revenue in the ecommerce segment. This is a solid
performance given the aggressive competition in many of
our markets. A big share of the growth came from Flipkart
(India), Souq (Middle East and North Africa) and eMAG
(Central and Eastern Europe (CEE)).
eMAG, the group's consolidated consumer platform in
CEE, expanded gross margins through better supplier terms,
a more favourable category mix and additional revenue
streams such as advertising. The group's CEE fashion
business, Fashion Days, merged with eMAG towards
the end of the financial year.
Built through organic growth and selective acquisitions,
the payments business now operates under one global
brand, PayU, across 16 countries. It is organised in three
regions: Latin America; Europe, Middle East and Africa
(EMEA); and India. PayU reported revenue growth of 1%
(20%). In the payment services provider (PSP) area, the
focus was on consolidating and migrating technology
platforms, increased automation and creating new features.
This has allowed the PSP business to scale and reduce
losses.
Online travel in India is a business opportunity for us – the
estimated US$9bn current market size is expected to
double by 2020. Improving its position in air ticketing and
hotel bookings, our Indian online travel business, ibibo,
generated revenue of US$91m. This is 67% higher in local
currency, adjusted for acquisitions and disposals. While
registering growth ahead of competitors, ibibo's air-ticketing
business turned profitable in the review period. The priority
for ibibo is now to expand its hotel segment. Currently only
13% of hotel transactions are online. This is expected to
grow to 40% in the next two to three years, creating a large
and profitable opportunity.
ibibo's bus-ticketing business, redBus, recorded robust
revenue growth of 37% in local currency and is looking at
opportunities to expand its footprint. Given the success
of redBus in India, the ibibo team has internationalised
the platform and strategy, and launched in Singapore and
Malaysia.
Movile, a leading mobile services platform in Latin
America, exceeded expectations despite the downturn
in the Brazilian economy and a deteriorating Brazilian
real. Additional investments during the year were focused
around iFood (a leading food-delivery platform in Brazil) and
PlayKids (mobile app for children). Movile has also made
some promising investments in a number of offline-to-online
platforms in Brazil and across Latin America.
Video entertainment
The video-entertainment segment generated revenues of
US$3.4bn – down 11% (up 10%) year on year. As customers
are billed in local currencies, the rapid weakening of
currencies in many African markets, driven by a rout in
commodity prices, resulted in lower US dollar revenues.
However, costs did not decline in a similar way as a
significant portion (content and transponder capacity) is
US dollar-denominated. Increased competition for content
also pushed up costs. The combination of lower revenues
and a higher cost base saw trading profit decrease to
US$610m – down 17% on the prior year.
Consolidated development spend of US$85m
(2015: US$206m) declined year on year, due to DTT scaling
further. ShowMax and DTT in sub-Saharan Africa comprise
the bulk of the current year's development spend.
The total base closed at 10.4m customers – 185 000 net
growth year on year. Macroeconomic headwinds are likely
for a while longer. During the year ahead we will absorb the
full impact of sub-Saharan currency and customer declines,
which will continue to depress financial performance in the
near term. Our strategy is to focus on the mid and lower
segments of the market, where there is still room for growth.
Early signs from consumers after content changes and
a commitment to maintain pricing in most sub-Saharan
markets are encouraging, but the outlook remains unclear
given current volatility.
Given uncertainty related to analogue switchoffs (ASOs) –
the process of migrating terrestrial television broadcasting
from analogue to digital format – we have chosen to focus
on content, service delivery, decoder sales and retention.
ASOs in several African markets are expected to take place
in the medium term and will then boost DTT customer
growth.
Further enhancements were made to the ShowMax product
in the second half of the year. The introduction of prepaid
vouchers, download functionality and Apple AirPlay
functionality has helped ShowMax. It offers deeper and
more compelling content than both local and international
competition. International and local players continue
to invest in this market, with global online players like
Netflix launching during the year and others in the process
of doing so.
Delivering great local and international content on
multiple platforms, developing innovative products,
driving customer retention, improving the total customer
experience and driving general cost controls remain focus
areas. Enhancements, competitive pricing and introducing
bundled packages (subscriptions bundled with the Explora
and installation) have seen personal video recorder (PVR)
penetration increase to 20.6% of South African customers
and 11% of customers in the rest of Africa.
Investing in local content remains important. We are proud
to be the largest producer of and investor in local content in
Africa. Over the past year we contributed US$325m to sport
and general entertainment content.
The Eutelsat 36C satellite was successfully launched
on 24 December 2015, providing additional capacity to
MultiChoice Africa. More capacity was also acquired from
Intelsat, with a new satellite expected to be launched in the
2017 financial year.
Our operations are regulated by various bodies across
the continent. A number of competition and consumer
investigations are under way and we continue to cooperate
with regulators.
Media (previously print media)
Sectoral and macroeconomic headwinds affected
Media24's topline growth with revenues declining 20% (2%).
Year-on-year trading profit improved marginally to US$29m,
despite continued investment in new initiatives. Media24's
digital media and ecommerce businesses delivered topline
growth of 8%.
Prospects
In the year ahead, the focus will be on continuing to
deliver topline growth while scaling the more established
ecommerce businesses. Naspers will invest in long-term
growth opportunities such as ShowMax, letgo and ibibo and
seek further new promising models. In video entertainment,
the loss of DTH subscribers and falling currencies in sub-
Saharan Africa will have a significant impact on earnings
and cash flows. It could take some time before the plans
implemented to reinvigorate growth and cut costs have a
material positive impact.
DIVIDEND NUMBER 87
(all figures in South African cents)
The board recommends that the annual gross dividend be
increased by 11% to 520 cents (previously 470 cents) per
listed N ordinary share, and 104 cents (previously 94 cents)
per unlisted A ordinary share. If confirmed by shareholders
at the annual general meeting on Friday 26 August 2016,
dividends will be payable to shareholders recorded in the
books on Friday 16 September 2016. It will be paid on Monday
19 September 2016. The last date to trade cum dividend
will be on Tuesday 13 September 2016 (shares therefore
to trade ex-dividend from Wednesday 14 September
2016). Share certificates may not be dematerialised or
rematerialised between Wednesday 14 September 2016
and Friday 16 September 2016, both dates inclusive.
The dividend will be declared from income reserves.
It will be subject to the dividend tax rate of 15%, yielding
a net dividend of 442 cents per listed N ordinary share
and 88.4 cents per unlisted A ordinary share to those
shareholders not exempt from paying dividend tax. Such
dividend tax will amount to 78 cents per listed N ordinary
share and 15.6 cents per unlisted A ordinary share.
The issued ordinary share capital as at 24 June 2016 was
437 920 115 N ordinary shares and 907 128 A ordinary shares.
The company's income tax reference number is 9550138714.
DIRECTORATE
Guijin Liu and Hendrik du Toit were appointed as
independent non-executive directors with effect from
1 April 2016.
Guijin Liu is highly experienced in international affairs. He is
Dean of the China-Africa International Business School,
Zhejiang Normal University and a past Chinese ambassador
to South Africa (2001 to 2007).
Hendrik du Toit is chief executive of Investec Asset
Management and a director of Investec plc and Investec Ltd.
He holds an MPhil in economics and politics of development
from Cambridge University and an MCom in economics
from Stellenbosch University.
PREPARATION OF THE SUMMARISED
CONSOLIDATED FINANCIAL RESULTS
The preparation of the summarised consolidated
financial results was supervised by the financial director,
Basil Sgourdos CA(SA). These results were made public
on 24 June 2016.
On behalf of the board
Koos Bekker Bob van Dijk
Chair Chief executive
Cape Town
24 June 2016
Summarised consolidated income statement
for the year ended 31 March
2016 2015
Restated %
Notes US$'m US$'m change
Revenue 5 930 6 569 (10)
Cost of providing services and sale of goods (3 392) (3 824)
Selling, general and administration expenses (2 423) (2 525)
Other gains/(losses) – net 7 (292) (59)
Operating (loss)/profit (177) 161 (>100)
Interest received 5 40 45
Interest paid 5 (292) (247)
Other finance income/(costs) – net 5 (100) (49)
Share of equity-accounted results 6 1 289 1 475
– excluding net gain resulting from remeasurements* 1 038 977 6
– net gain resulting from remeasurements* 251 498
Impairment of equity-accounted investments (55) (39)
Dilution gains on equity-accounted investments 104 113
Gains on acquisitions and disposals 452 139
Profit before taxation 7 1 261 1 598 (21)
Taxation (260) (338)
Profit for the year 1 001 1 260 (20)
Attributable to:
Equity holders of the group 994 1 257
Non-controlling interest 7 3
1 001 1 260
Core headline earnings for the year (US$'m) 4 1 246 1 030 21
Core headline earnings per N ordinary share (US cents) 298 255 17
Fully diluted core headline earnings per N ordinary share (US cents) 292 249 18
Headline earnings for the year (US$'m) 4 701 674 4
Headline earnings per N ordinary share (US cents) 168 167 1
Fully diluted headline earnings per N ordinary share (US cents) 162 161 1
Earnings per N ordinary share (US cents) 238 311 (23)
Fully diluted earnings per N ordinary share (US cents) 232 305 (24)
Net number of shares issued ('000)
– At year-end 431 085 411 998
– Weighted average for the year 417 575 403 576
– Fully diluted weighted average 419 208 405 171
* Remeasurements refer to business combination-related gains and losses and disposals of investments. Refer to note 2 for details of the
restatement resulting from the group's change in presentation currency.
Summarised consolidated statement of comprehensive income
for the year ended 31 March
2016 2015
Restated
US$'m US$'m
Profit for the year 1 001 1 260
Total other comprehensive income, net of tax, for the year(1) 374 (1 164)
Translation of foreign operations(2) (309) (1 290)
Net fair value gains/(losses) 11 (2)
Cash flow hedges 42 34
Share of other comprehensive income and reserves of equity-accounted investments 633 101
Tax on other comprehensive income (3) (7)
Total comprehensive income for the year 1 375 96
Attributable to:
Equity holders of the group 1 406 123
Non-controlling interest (31) (27)
1 375 96
Notes
(1) These components of other comprehensive income may subsequently be reclassified to profit or loss except for gains of US$387m (2015:
US$113m) included in the "Share of other comprehensive income and reserves of equity-accounted investments" as well as losses of US$nil (2015:
US$2m) included in "Net fair-value gains/(losses)" relating to remeasurements on the group's post-employment benefit plans.
(2) The movement on the foreign currency translation reserve for the year relates primarily to the effects of foreign exchange rate fluctuations related
to the group's net investments in its foreign operations.
Refer to note 2 for details of the restatement resulting from the group's change in presentation currency.
Summarised consolidated statement of changes in equity
for the year ended 31 March
2016 2015
Restated
US$'m US$'m
Balance at the beginning of the year 6 903 6 477
Changes in share capital and premium
Movement in treasury shares (68) 94
Share capital and premium issued 2 300 310
Changes in reserves
Total comprehensive income for the year 1 406 123
Movement in share-based compensation reserve 120 65
Movement in existing control business combination reserve 9 (86)
Movement in valuation reserve – 31
Direct retained earnings movements – (11)
Dividends paid to Naspers shareholders (161) (160)
Changes in non-controlling interest
Total comprehensive income for the year (31) (27)
Dividends paid to non-controlling shareholders (125) (128)
Movement in non-controlling interest in reserves 301 215
Balance at the end of the year 10 654 6 903
Comprising:
Share capital and premium 4 965 2 733
Retained earnings 6 110 5 277
Share-based compensation reserve 1 231 724
Existing control business combination reserve (184) (193)
Hedging reserve 35 (2)
Valuation reserve 573 421
Foreign currency translation reserve (2 476) (2 312)
Non-controlling interest 400 255
Total 10 654 6 903
Refer to note 2 for details of the restatement resulting from the group's change in presentation currency.
Summarised consolidated statement of financial position
as at 31 March 31 March 1 April
2016 2015 2014
Restated Restated
Notes US$'m US$'m US$'m
Assets
Non-current assets 13 486 10 236 9 515
Property, plant and equipment 1 443 1 425 1 619
Goodwill 8 2 818 1 891 2 451
Other intangible assets 1 190 451 541
Investments in associates 9 7 625 6 058 4 535
Investments in joint ventures 9 218 228 164
Other investments and loans 9 57 78 113
Other receivables 20 – –
Derivative financial instruments – 8 –
Deferred taxation 115 97 92
Current assets 3 237 2 700 2 698
Inventory 194 262 274
Programme and film rights 160 154 188
Trade receivables 393 398 460
Other receivables and loans 491 438 458
Derivative financial instruments 59 37 20
Cash and cash equivalents 1 714 1 226 1 298
3 011 2 515 2 698
Assets classified as held for sale 11 226 185 –
Total assets 16 723 12 936 12 213
Equity and liabilities
Share capital and reserves 10 254 6 648 6 282
Share capital and premium 4 965 2 733 2 329
Other reserves (821) (1 362) (238)
Retained earnings 6 110 5 277 4 191
Non-controlling shareholders' interest 400 255 195
Total equity 10 654 6 903 6 477
Non-current liabilities 4 023 3 852 3 471
Capitalised finance leases 771 617 643
Liabilities – interest bearing 2 922 3 057 2 601
– non-interest bearing 8 25 43
Other non-current liabilities 3 – –
Post-employment medical liability 13 17 17
Derivative financial instruments 20 12 35
Deferred taxation 286 124 132
Current liabilities 2 046 2 181 2 265
Current portion of long-term debt 227 354 250
Trade payables 437 448 505
Accrued expenses and other current liabilities 1 253 1 295 1 327
Derivative financial instruments 31 47 80
Bank overdrafts and call loans 1 26 103
1 949 2 170 2 265
Liabilities classified as held for sale 11 97 11 –
Total equity and liabilities 16 723 12 936 12 213
Net asset value per N ordinary share (US cents) 2 379 1 614 1 580
Refer to note 2 for details of the restatement resulting from the group's change in presentation currency.
Summarised consolidated statement of cash flows
for the year ended 31 March
2016 2015
Restated
US$'m US$'m
Cash flows from operating activities
Cash generated from operating activities 454 574
Interest income received 46 46
Dividends received from investments and equity-accounted companies 146 100
Interest costs paid (246) (227)
Taxation paid (322) (334)
Net cash generated from operating activities 78 159
Cash flows from investing activities
Acquisitions and disposals of tangible and intangible assets (228) (292)
Acquisitions of subsidiaries, associates and joint ventures (1 426) (406)
Disposals of subsidiaries, associates and joint ventures 289 158
Cash movement in other investments and loans (19) (12)
Net cash utilised in investing activities (1 384) (552)
Cash flows from financing activities
Proceeds from issue of share capital 2 470 –
Proceeds from long- and short-term loans raised 2 000 805
Repayments of long- and short-term loans (2 270) (204)
(Outflow)/inflow from share-based compensation transactions (13) 171
Dividends paid by the holding company and its subsidiaries (254) (274)
Other movements resulting from financing activities (41) 53
Net cash generated from financing activities 1 892 551
Net movement in cash and cash equivalents 586 158
Foreign exchange translation adjustments (73) (149)
Cash and cash equivalents at the beginning of the year 1 200 1 195
Cash and cash equivalents classified as held for sale – (4)
Cash and cash equivalents at the end of the year 1 713 1 200
Refer to note 2 for details of the restatement resulting from the group's change in presentation currency.
Segmental review
for the year ended 31 March
Revenue
2016 2015
Restated %
US$'m US$'m change
Internet 8 237 6 999 18
– Tencent 5 417 4 297 26
– Mail.ru 173 210 (18)
– Ecommerce 2 647 2 492 6
Video entertainment 3 413 3 830 (11)
Media 608 762 (20)
Corporate services 1 5 (80)
Intersegmental (35) (55) 36
Economic interest 12 224 11 541 6
Less: Equity-accounted investments (6 294) (4 972) (27)
Consolidated 5 930 6 569 (10)
EBITDA(1)
2016 2015
Restated %
US$'m US$'m change
Internet 1 845 1 394 32
– Tencent 2 415 1 782 36
– Mail.ru 78 114 (32)
– Ecommerce (648) (502) (29)
Video entertainment 799 920 (13)
Media 52 52 –
Corporate services (12) (30) 60
Economic interest 2 684 2 336 15
Less: Equity-accounted investments (2 261) (1 786) (27)
Consolidated 423 550 (23)
Trading profit
2016 2015
Restated %
US$'m US$'m change
Internet 1 619 1 177 38
– Tencent 2 246 1 616 39
– Mail.ru 66 104 (37)
– Ecommerce (693) (543) (28)
Video entertainment 610 732 (17)
Media 29 22 32
Corporate services (12) (30) 60
Economic interest 2 246 1 901 18
Less: Equity-accounted investments (2 067) (1 603) (29)
Consolidated 179 298 (40)
Note
(1) EBITDA refers to earnings before interest, taxation, depreciation and amortisation.
Refer to note 2 for details of the restatement resulting from the group's change in presentation currency.
Reconciliation of trading profit to operating(loss)/profit
for the year ended 31 March
2016 2015
US$'m US$'m
Trading profit 179 298
Finance cost on transponder leases 33 34
Amortisation of other intangible assets (68) (68)
Other gains/(losses) – net (292) (59)
Retention option expense (2) (14)
Share-based incentives settled in treasury shares (27) (30)
Operating (loss)/profit (177) 161
Note: For a reconciliation of operating profit to (loss)/profit before taxation, refer to the condensed consolidated income statement.
Notes to the summarised consolidated financial results
1. General information
Naspers Limited (Naspers) is a global internet and entertainment group and one of the largest technology investors in the
world. Founded in 1915, we now operate in more than 130 countries and markets with long-term growth potential. Naspers
builds leading companies that empower people and enrich communities. It runs some of the world's leading platforms in
internet, video entertainment and media.
2. Basis of presentation and accounting policies
The summarised consolidated financial results for the year ended 31 March 2016 are prepared in accordance with the
JSE Limited's stock exchange (JSE) Listings Requirements (the Listings Requirements) relevant to summarised financial
statements and the provisions of the Companies Act. No 71 of 2008. The Listings Requirements require provisional
reports to be prepared in accordance with the framework concepts, the measurement and recognition requirements of
International Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guides as issued by the Accounting
Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council, and to also,
as a minimum, contain the information required by IAS 34 Interim Financial Reporting. The summarised consolidated
financial results do not include all the disclosures required for complete annual financial statements prepared in
accordance with IFRS as issued by the International Accounting Standards Board (IASB). The accounting policies applied
in the preparation of the consolidated annual financial statements from which the summarised consolidated financial
results were derived, are consistent with those applied in the previous consolidated annual financial statements except as
set out below.
On 18 April 2016 Naspers announced that it had changed the presentation currency in its consolidated financial
statements from the South African rand (SA rand) to the United States dollar (US dollar) with effect from the financial
year ended on 31 March 2016.
Over the past 100 years the group has evolved from a single-country newspaper business and early investor in pay
television to a video-entertainment leader and global internet and ecommerce group with operations in over 130 countries.
Today more than 75% of revenue measured on an economic-interest basis (which includes the group's proportionate share
of the revenue of associates and joint ventures) is sourced from outside of South Africa.
Coupled with the evolution of the business, the group's shareholder base now largely comprises foreign investors to whom
financial reporting in SA rand is of limited relevance. Internally, the board also bases its performance evaluation and many
investment decisions on US dollar financial information.
The board therefore believes that US dollar financial reporting provides more relevant presentation of the group's financial
position, funding and treasury functions, financial performance and its cash flows.
Dividends will continue to be declared in SA rand, with the relevant exchange rate announced at the time of the dividend
payment.
A change in presentation currency represents a change in an accounting policy in terms of IAS 8 Accounting Policies,
Changes in Accounting Estimates and Errors requiring the restatement of comparative information. In accordance with
IAS 21 The Effects of Changes in Foreign Exchange Rates, the following methodology was followed in restating historical
financial information from SA rand into US dollar:
• Non-US dollar assets and liabilities were translated at the relevant closing exchange rate at the end of the reporting
period. Non-US dollar items of income and expenditure and cash flows were translated at actual transaction date
exchange rates.
• The foreign currency translation reserve was reset to nil as at 1 April 2006, the date on which the group adopted IFRS,
in line with IFRS 1 First-time Adoption of International Financial Reporting Standards. Share capital and premium and
other reserves, as appropriate, were translated at the historic rates prevailing at the dates of underlying transactions.
• The effects of translating the group's financial results and financial position into US dollar were recognised in the
foreign currency translation reserve.
Although actual transaction date exchange rates were used to translate previously reported SA rand earnings and cash
flows into US dollar, the group has provided the average exchange rates of its major trading currencies relative to the
US dollar as an approximation for these rates for reference in the following table. The closing exchange rates of the group's
major trading currencies relative to the US dollar, used when translating the statements of financial position presented in
this release into US dollar, are also detailed in this table.
31 March 2015 31 March 2014
Average rate Closing rate Average rate Closing rate
South African rand 0.0899 0.0824 0.0982 0.0950
Euro 1.2470 1.0743 1.3426 1.3774
Chinese yuan renminbi 0.1614 0.1613 0.1633 0.1609
Brazilian real 0.3997 0.3143 0.4412 0.4433
Polish zloty 0.2984 0.2635 0.3183 0.3304
Russian rouble 0.0215 0.0172 0.0301 0.0284
The group has adopted all new and amended accounting pronouncements issued by the IASB that are effective for
financial years commencing 1 April 2015. None of the new or amended accounting pronouncements that are effective for
the financial year commencing 1 April 2015 had a material impact on the group.
The group's reportable segments reflect the components of the group that are regularly reviewed by the chief executive
officer and other senior executives who make strategic decisions. The group proportionately consolidates its share of the
results of its associates and joint ventures in its reportable segments.
Trading profit excludes amortisation of intangible assets (other than software), equity-settled share-based payment
expenses relating to transactions to be settled through the issuance of treasury shares, retention option expenses and
other gains/losses, but includes the finance cost on transponder leases.
Core headline earnings exclude one-off and non-operating items. We believe it is a useful measure of the group's
sustainable operating performance. However, this is not a defined term under IFRS and may not be comparable with
similarly titled measures reported by other companies.
3. Independent audit
The summarised consolidated financial results have been audited by the company's auditor, PricewaterhouseCoopers
Inc. (PwC). The individual auditor assigned to perform the audit is Brendan Deegan. PwC's unqualified audit reports on the
consolidated annual financial statements and summarised consolidated financial results are available for inspection at
the registered office of the company. The auditor's report does not necessarily cover all the information contained in the
summarised financial results. Shareholders are therefore advised that, in order to obtain a full understanding of the nature
of the auditor's work, they should obtain a copy of that report, together with the consolidated annual financial statements
from the registered office of the company. The consolidated annual financial statements, together with the integrated
annual report, will be available on www.naspers.com on or about 22 July 2016.
4. Headline and core headline earnings Year ended
31 March
2016 2015
US$'m US$'m
Net profit attributable to shareholders 994 1 257
Adjusted for:
– insurance proceeds (1) (2)
– impairment of property, plant and equipment and other assets 43 44
– impairment of goodwill and other intangible assets 155 15
– loss on sale of assets 3 –
– loss on remeasurement of disposal groups classified as held for sale to fair value
less costs of disposal 88 –
– gains on acquisitions and disposals of investments (110) (150)
– remeasurement of previously held interest (348) (3)
– dilution gains on equity-accounted investments (104) (113)
– remeasurements included in equity-accounted earnings (125) (396)
– impairment of equity-accounted investments 55 39
650 691
Total tax effects of adjustments 54 (9)
Total adjustment for non-controlling interest (3) (8)
Headline earnings 701 674
Adjusted for:
– equity-settled share-based payment expenses 218 136
– (recognition)/reversal of deferred tax assets (1) 20
– amortisation of other intangible assets 230 150
– fair-value adjustments and currency translation differences 90 26
– retention option expense 2 12
– business combination related losses 6 12
Core headline earnings 1 246 1 030
The diluted earnings, headline earnings and core headline earnings per share figures presented on the face of the income
statement include a decrease of US$20m (2015: US$20m) relating to the future dilutive impact of potential ordinary shares
issued by equity-accounted investees.
5. Interest received/(paid)
Year ended
31 March
2016 2015
US$'m US$'m
Interest received 40 45
– loans and bank accounts 37 39
– other 3 6
Interest paid (292) (247)
– loans and overdrafts (207) (182)
– transponder leases (33) (34)
– other (52) (31)
Other finance income/(cost) – net (100) (49)
– net foreign exchange differences and fair-value adjustments on derivatives (102) (53)
– preference dividends received 2 4
6. Equity-accounted results
The group's equity-accounted investments contributed to the summarised consolidated financial results as follows:
Year ended
31 March
2016 2015
US$'m US$'m
Share of equity-accounted results 1 289 1 475
– sale of assets – 3
– disposal of investments (251) (498)
– impairment of investments 180 98
Contribution to headline earnings 1 218 1 078
– amortisation of other intangible assets 174 101
– equity-settled share-based payment expenses 191 106
– fair-value adjustments and currency translation differences 6 (10)
Contribution to core headline earnings 1 589 1 275
Tencent 1 797 1 316
Mail.ru 45 90
Other (253) (131)
7. Profit before taxation
In addition to the items already detailed, profit before taxation has been determined after taking into account, inter alia, the
following:
31 March
2016 2015
US$'m US$'m
Depreciation of property, plant and equipment 186 198
Amortisation 94 88
– other intangible assets 67 68
– software 27 20
Net realisable value adjustments on inventory, net of reversals(1) 78 55
Other gains/(losses) – net (292) (59)
– loss on sale of assets (3) –
– impairment of goodwill and other intangible assets (155) (15)
– impairment of property, plant and equipment and other assets (43) (44)
– remeasurement of disposal groups classified as held for sale to fair value less
costs of disposal (88)
– insurance proceeds 1 2
– fair-value adjustments on financial instruments (4) (2)
Gains on acquisitions and disposals 452 139
– profit on sale of investments 110 68
– gains recognised on loss of control transactions – 82
– remeasurement of contingent consideration 2 2
– acquisition-related costs (8) (16)
– remeasurement of previously held interest 348 3
Note
(1) Net realisable value writedowns relate primarily to set-top box subsidies in the video-entertainment segment.
8. Goodwill
Goodwill is subject to an annual impairment assessment. Movements in the group's goodwill for the year are detailed
below:
Year ended
31 March
2016 2015
US$'m US$'m
Goodwill
– cost 2 170 2 792
– accumulated impairment (279) (341)
Opening balance 1 891 2 451
– foreign currency translation effects (26) (441)
– acquisitions of subsidiaries and businesses 1 260 105
– disposals of subsidiaries and businesses (7) (84)
– transferred to assets classified as held for sale (155) (138)
– impairment (145) (2)
Closing balance 2 818 1 891
– cost 3 175 2 170
– accumulated impairment (357) (279)
The impairment loss recognised during the current reporting period relates primarily to the group's investment in its online
comparison shopping business, Buscapé. Buscapé forms part of the ecommerce segment. The impairment loss has been
calculated on a value-in-use basis using a 10-year projected cash flow model, a growth rate of 4% and a discount rate of
20%. If the discount rate applied to cash flows were to increase by 5% and the growth rate used to extrapolate cash flows
were to decrease by 5%, there would be no further significant impairments that would have to be recognised.
9. Investments and loans
The following relates to the group's investments and loans as at the end of the reporting period:
Year ended
31 March
2016 2015
US$'m US$'m
Investments and loans 7 900 6 364
– listed investments 6 977 5 291
– unlisted investments and loans 923 1 073
10. Commitments
Commitments relate to amounts for which the group has contracted, but that have not yet been recognised as obligations
in the statement of financial position.
Year ended
31 March
2016 2015
US$'m US$'m
Commitments 3 254 2 918
– capital expenditure 16 41
– programme and film rights 2 245 1 650
– network and other service commitments 176 141
– transponder leases 573 909
– operating lease commitments 207 124
– set-top box commitments 37 53
The group has made certain restatements to transponder lease and programme and film rights commitments reported
during the comparative period. These adjustments resulted in an increase in total commitments of US$445m.
11. Disposal groups classified as held for sale
The group classified the net assets and liabilities of Netretail, its Czech etail and ecommerce platform; Heureka, the
group's Czech online comparison shopping platform, as well as the assets and liabilities of other smaller businesses as
held for sale during the year ended 31 March 2016. The above-mentioned transactions are subject to regulatory approval.
The group concluded the disposals of its subsidiaries Ricardo.ch AG and Korbitec Proprietary Limited following the receipt
of regulatory approval during September and November 2015 respectively. These businesses were previously classified as
held for sale. Refer to note 12 for additional details regarding these disposals.
The carrying values of the assets and liabilities of all disposal groups classified as held for sale as at 31 March 2016 are
detailed below:
Year ended
31 March
2016 2015
US$'m US$'m
Assets 226 185
Property, plant and equipment 28 8
Goodwill and other intangible assets 124 156
Investment in joint venture 4 -
Deferred taxation assets 1 6
Inventory 38 2
Trade and other receivables 19 9
Cash and cash equivalents 12 4
Liabilities 97 11
Deferred taxation liabilities 9 3
Long-term liabilities 2 -
Trade payables 39 2
Accrued expenses and other current liabilities 35 6
Bank overdrafts 12 –
The group recognised a loss of US$87.7m (2015: US$nil) on remeasuring the net assets of businesses classified as held
for sale to their fair value less costs of disposal during the year. The fair value of the businesses was determined based
on third-party sales prices. This represents a level 3 fair-value measurement.
12. Business combinations and other acquisitions
The group acquired an additional 49.0% interest in its associate Avito AB (Avito), the leading online classifieds platform
in Russia, during December 2015. The additional investment resulted in the group holding a 67.5% interest in Avito on
a fully diluted basis and was accounted for as a business combination. The total purchase consideration amounted to
US$1.67bn representing cash paid to the former owners of Avito of US$1.23bn, the fair value of the group's previously
held equity interest in Avito of US$411m, as well as the acquisition-date fair value of Avito's vested share-based incentive
awards of US$22m. A gain of US$324m has been recognised in "Gains on acquisitions and disposals" in the income
statement on the remeasurement of the group's previously held equity interest in Avito to its fair value. The purchase
price allocation: property, plant and equipment US$6m; cash US$24m; trade and other receivables US$9m; deferred
tax assets US$2m; intangible assets US$812m; trade and other payables US$18m; deferred tax liabilities US$161m and
the balance of US$1.19bn to goodwill. The main classes of intangible assets recognised in the business combination
were brand names, customer bases and software. The transaction gave rise to the recognition of a non-controlling
interest of US$195m, which has been measured at the non-controlling interest's proportionate share of the identifiable
net assets of Avito as at the acquisition date.
In May 2015 the group invested US$10m in Ambatana Holdings B.V. (Ambatana), an entity operating a hyperlocal
classifieds marketplace app under the letgo brand. The investment resulted in Ambatana being accounted for as an
associate of the group. A further US$50m was invested in Ambatana during September 2015, resulting in the group
holding a 67.5% interest on a fully diluted basis following the investment. The additional investment was accounted for
as a business combination with an effective date of 30 September 2015. The total purchase consideration amounted to
US$58m, representing the fair value of the group's previously held equity interest in Ambatana of US$34m and the fair
value of a call option granted to the former owners of Ambatana amounting to US$24m. The cash invested and cash
consideration still payable, in aggregate amounting to US$50m, remains within the group following the transaction and
is accordingly not disclosed as part of the consideration transferred by the group or assets of Ambatana acquired,
although it did affect the amount of goodwill recognised in the business combination. A gain of US$24m has been
recognised in "Gains on acquisitions and disposals" in the income statement on the remeasurement of the group's
previously held equity interest in Ambatana to its fair value. The purchase price allocation: cash US$1m; other
receivables US$1m; trade and other payables US$3m and the balance of US$74m to goodwill. The transaction gave rise
to the recognition of a non-controlling interest of US$15m, which has been measured at the non-controlling interest's
proportionate share of the identifiable net assets of Ambatana as at the acquisition date. On 31 March 2016 the call option
granted to the former owners of Ambatana was settled, resulting in the group holding a 55.0% interest in Ambatana on a
fully diluted basis at year-end.
Since the acquisition dates of the above business combinations, revenue of US$31m and net results (losses) of US$60m
have been included in the income statement relating to Ambatana and Avito. Had the revenue and net results of Ambatana
and Avito been included from 1 April 2015, group revenue and net profit would have amounted to US$6.01bn and US$1.02bn
respectively.
The main factor contributing to the goodwill recognised in the acquisitions is the acquiree's market presence. The goodwill
that arose is not expected to be deductible for income tax purposes. Total acquisition-related costs of US$8m were
recorded in "Gains on acquisitions and disposals" in the income statement regarding the above-mentioned acquisitions.
The following relates to the group's investments in its equity-accounted investees:
During April 2015 the group invested US$41m in its joint venture Konga Online Shopping Limited (Konga). Following the
additional investment, the group continues to exert joint control over Konga with its 50.9% interest on a fully diluted basis.
The group's associate Flipkart Limited (Flipkart) undertook two funding rounds during April and July 2015 in which the
group did not participate. The funding rounds resulted in a dilution of the group's interest in Flipkart and in the recognition
of an aggregate net dilution gain of US$61m in "Dilution gains on equity-accounted investments" in the income statement.
Following the dilutions, the group now holds a 15.0% interest in Flipkart on a fully diluted basis.
During May 2015 the group invested US$10m in its joint venture Souq Group Limited (Souq) as part of a funding round.
Souq undertook further funding rounds during the year in which the group did not participate. These funding rounds
resulted in a dilution of the group's interest in Souq and in the recognition of an aggregate net dilution gain of US$75m
in "Dilution gains on equity-accounted investments" in the income statement. Following the dilutions, the group now holds
a 36.4% interest in Souq on a fully diluted basis.
The group also recognised dilution losses of US$42m during the year relating to dilutions in its shareholding in Tencent
on account of the exercise of share-based incentive awards by Tencent's employees.
The group invested US$20m in its available-for-sale investment Avenida Inc. (Avenida) during July 2015. The transaction
resulted in Avenida becoming an associate, and the group now holds a 23.4% interest in Avenida on a fully diluted basis.
The group invested US$54m as part of a funding round of its associate Takealot Online (RF) Proprietary Limited (Takealot)
during August 2015. The group holds a 42.4% interest in Takealot on a fully diluted basis.
The following relates to significant disposals by the group during the reporting period:
During September 2015 the group disposed of its interest in its subsidiary Ricardo.ch AG following approval of the
transaction by regulatory authorities. The proceeds on sale amounted to US$248m and a gain of US$76m was recognised
in "Gains on acquisitions and disposals" in the income statement following the transaction.
The group disposed of its interest in its subsidiary Korbitec Proprietary Limited during November 2015 for US$33m
following the receipt of regulatory approval. A gain of US$24m was recognised in "Gains on acquisitions and disposals"
in the income statement following the transaction.
During March 2016 the group disposed of its interest in its subsidiary PayProp Group Services Proprietary Limited for
US$10m. The disposal gave rise to the recognition of a gain of US$4m in "Gains on acquisitions and disposals" in the
income statement.
The group disposed of its 9.9% interest in Beijing Media Corporation during August 2015 for a cash consideration of
US$12m. The transaction resulted in the recognition of an aggregate gain on disposal of US$11m, which has been
recognised in "Gains on acquisitions and disposals" in the income statement.
Investments acquired and funding rounds participated in were funded through the utilisation of existing credit facilities,
proceeds received from disposals during the reporting period as well as the proceeds from the equity raise during
December 2015.
13. Proceeds from placement of N ordinary shares and issue of listed bond
During December 2015 the group placed 18 167 848 new N ordinary shares with qualifying institutional investors at a price
of R1 975 per share, thereby raising gross proceeds of approximately US$2.5bn before transaction costs. The placing
represented approximately 4.3% of Naspers's issued N ordinary share capital prior to the share issuance. The proceeds
raised were utilised to fund the group's acquisition of a controlling interest in Avito AB (refer to note 12), to repay certain
amounts on the group's offshore revolving credit facility and the remainder will serve to fund the group's future growth
strategy.
In July 2015 the group issued a 10-year US$1.2bn bond. The bond matures in July 2025 and carries a fixed interest rate of
5.5% per annum. The proceeds were utilised for general corporate purposes, including the repayment of certain amounts
on the group's offshore revolving credit facility and to fund acquisitions and growth.
14. Financial instruments
The fair values of the group's financial instruments that are measured at fair value at each reporting period are
categorised as follows:
Fair-value measurements at
31 March 2016 using:
Quoted prices
in active
markets for Significant
identical other Significant
assets observable unobservable
or liabilities inputs inputs
(level 1) (level 2) (level 3)
US$'m US$'m US$'m
Assets
Available-for-sale investments 12 – –
Foreign exchange contracts – 48 –
Currency devaluation features – – 11
Liabilities
Foreign exchange contracts – 17 –
Shareholders' liabilities – – 13
Earnout obligations – – 22
Interest rate swaps – 21 –
Fair-value measurements at
31 March 2015 using:
Quoted prices
in active
markets for Significant
identical other Significant
assets observable unobservable
or liabilities inputs inputs
(level 1) (level 2) (level 3)
US$'m US$'m US$'m
Assets
Available-for-sale investments 12 – –
Foreign exchange contracts – 45 –
Liabilities
Foreign exchange contracts – 2 –
Shareholders' liabilities – – 29
Earnout obligations – – 39
Interest rate swaps – 28 –
There have been no transfers between levels 1, 2 or 3 during the reporting period, nor were there any significant changes to
the valuation techniques and inputs used in measuring fair value.
Financial instruments for which fair value is disclosed:
Carrying Fair
31 March 2016 value value
Financial liabilities US$'m US$'m
Capitalised finance leases 836 865
Publicly traded bonds 2 900 3 035
Carrying Fair
31 March 2015 value value
Financial liabilities US$'m US$'m
Capitalised finance leases 679 703
Publicly traded bonds 1 700 1 861
The fair values of the capitalised finance leases have been determined through discounted cash flow analysis. The fair
values of the publicly traded bonds have been determined with reference to the listed prices of the instruments as at the
end of the reporting period.
A reconciliation of the movements in the carrying values of level 3 fair-value measurements is provided below:
Currency Share
devaluation holders' Earnout
Year ended 31 March 2016 features liabilities obligations Total
US$'m US$'m US$'m US$'m
Opening balance – (29) (39) (68)
Total gains/(losses) in the income statement 8 (4) 3 7
Total gains recognised as adjustments to the
cost of programme and film rights 3 – – 3
Additional obligations raised(1) – (27) (1) (28)
Cancellations/reclassifications – 4 – 4
Settlements – 43 11 54
Foreign currency translation effects – – 4 4
Closing balance 11 (13) (22) (24)
Note
(1) Includes an amount of US$2m relating to an obligation raised through the income statement.
Currency Share
devaluation holders' Earnout
Year ended 31 March 2015 features liabilities obligations Total
US$'m US$'m US$'m US$'m
Opening balance – (77) (25) (102)
Total (losses)/gains in the income statement – (4) 2 (2)
Additional obligations raised – – (29) (29)
Cancellations/reclassifications – 45 – 45
Settlements – 6 10 16
Foreign currency translation effects – 1 3 4
Closing balance – (29) (39) (68)
Currency devaluation features relate to clauses in content acquisition agreements that provide the group with protection
against significant currency devaluations. The fair value of currency devaluation features is measured through the use of
discounted cash flow techniques.
The fair value of shareholders' liabilities is determined using a discounted cash flow model. Business-specific adjusted
discount rates are applied to estimated future cash flows.
For earnout obligations, current forecasts of the extent to which management believes performance criteria will be met,
discount rates reflecting the time value of money and contractually specified earnout payments are used. Changes in
these assumptions could affect the reported fair value of these financial instruments. The fair value of level 2 financial
instruments is determined with the use of exchange rates quoted in active markets and interest rate extracts from
observable yield curves.
15. Related-party transactions and balances
The group entered into various related-party transactions in the ordinary course of business. There have been no
significant changes in related-party transactions and balances since the previous reporting period.
16. Events after the reporting period
On 12 May 2016 the group announced the merger of the US operations of its mobile marketplace for second-hand
goods, letgo, with Wallapop, another leader in the mobile classifieds sector. The transaction resulted in the absorption of
Wallapop's US operations into letgo. The group retains control over letgo following the merger and will account for the
absorption of Wallapop as a business combination in the 2017 financial year.
On 11 May 2016 the group announced its first investment targeting the education technology market by investing US$13m,
through Naspers Ventures, in Brainly – a social learning network. Over 60m students in 35 countries interact with Brainly
every month. In line with this strategy, the group also invested US$60m in Udemy, an online education marketplace with over
7m students enrolled and US$22m in Codecademy, a leading global platform focused on online coding education, both during
June 2016.
In June 2016 the group received regulatory approval for the sale of its business classified as held for sale, Heureka.
The group consequently recognised a gain on disposal of approximately US$61m.
17. Pro forma financial information
The group has presented certain revenue and trading profit metrics in local currency, excluding the effects of changes
in the composition of the group (the pro forma financial information) in the following tables. The pro forma financial
information is the responsibility of the board of directors (the board) of Naspers Limited and is presented for illustrative
purposes. Information presented on a pro forma basis has been extracted from the group's management accounts, the
quality of which the board is satisfied with.
Shareholders are advised that, due to the nature of the pro forma financial information and the fact that it has been
extracted from the group's management accounts, it may not fairly present the group's financial position, changes in
equity, results of operations or cash flows.
The review report issued by the group's external auditor and which appears at the end of these summarised consolidated
financial results does not extend to the pro forma financial information. An assurance report issued in respect of the pro
forma financial information, by the group's external auditor, is available at the registered office of the company.
The pro forma financial information has been prepared to illustrate the impact of changes in foreign exchange rates and
changes in the composition of the group on its results for the periods ended 31 March 2016 and 31 March 2015 respectively.
The following methodology was applied in calculating the pro forma financial information:
1. Foreign exchange/constant currency adjustments have been calculated by adjusting the current period's results to
the prior period's average foreign exchange rates, determined as the average of the monthly exchange rates for that
period. The local currency financial information quoted is calculated as the constant currency results, arrived at using
the methodology outlined above, compared to the prior period's actual IFRS results. The relevant average exchange
rates used for the group's most significant functional currencies are listed in note 2.
2. Adjustments made for changes in the composition of the group relate to acquisitions and disposals of subsidiaries
and equity-accounted investments, as well as to changes in the group's shareholding in its equity-accounted
investments. The following significant changes in the composition of the group during the respective reporting periods
have been adjusted for in arriving at the pro forma financial information:
Year ended 31 March 2016
Basis of Reportable Acquisition/
Transaction accounting segment Disposal
Disposal of the group's interest in Ricardo.ch AG Subsidiary Ecommerce Disposal
Acquisition of the group's interest in Avito AB Subsidiary Ecommerce Acquisition
Acquisition of the group's interest in Ambatana Holdings B.V. Subsidiary Ecommerce Acquisition
Disposal of the group's interest in 7Pixel Srl Subsidiary Ecommerce Disposal
Disposal of Kalahari.com Subsidiary Ecommerce Disposal
Merger of the group's subsidiary iFood with Just Eat Brazil Subsidiary Ecommerce Acquisition
Acquisition of the group's interest in Takealot Online (RF)
Proprietary Limited Associate Ecommerce Acquisition
Dilution of the group's interest in Tencent Associate Internet Disposal
Dilution of the group's interest in Flipkart Limited Associate Ecommerce Disposal
Disposal by Tencent of its ecommerce businesses to JD.com Associate Internet Disposal
Acquisition of the group's additional interest in Konga Online
Shopping Limited Joint venture Ecommerce Acquisition
Dilution of the group's interest in Souq Group Limited Joint venture Ecommerce Disposal
The net adjustment made for all acquisitions and disposals that took place during the year ended 31 March 2016 amounted
to a negative adjustment of US$295m on revenue and a negative adjustment of US$24m on trading profit.
Year ended 31 March 2015
Basis of Reportable Acquisition/
Transaction accounting segment Disposal
Acquisition of the group's controlling interest in redBus Subsidiary Ecommerce Acquisition
Acquisition of the group's controlling interest in Dubizzle Limited Subsidiary Ecommerce Acquisition
Disposal of Kalahari.com Subsidiary Ecommerce Disposal
Acquisition of the group's additional interest in Flipkart Limited Associate Ecommerce Acquisition
Acquisition of the group's interest in Neralona Investments
Limited (eSky.ru) Associate Ecommerce Acquisition
Acquisition of the group's interest in SimilarWeb Limited Associate Ecommerce Acquisition
Disposal by Tencent of its ecommerce businesses to JD.com Associate Internet Disposal
Acquisition of the group's additional interest in Souq Group
Limited Joint venture Ecommerce Acquisition
The net adjustment made for all acquisitions and disposals that took place during the year ended 31 March 2015 amounted
to a negative adjustment of US$288m on revenue and a positive adjustment of US$3m on trading profit.
The adjustments to the amounts reported in terms of IFRS, that have been made in arriving at the pro forma financial
information are presented in the table below:
Year ended
31 March
2015 2016 2016 2016 2016 2016 2016
A B C D E(2) F(3) G(4)
Foreign Group Local Local
currency composition n currency currency
IFRS adjustment adjustment growth IFRS growth IFRS
US$'m US$'m US$'m US$'m US$'m % change % change
Revenue(1)
Internet 6 999 (628) (298) 2 164 8 237 31 18
– Tencent 4 297 (154) (280) 1 554 5 417 36 26
– Mail.ru 210 (77) 20 20 173 10 (18)
– Ecommerce 2 492 (397) (38) 590 2 647 24 6
Video entertainment 3 830 (811) - 394 3 413 10 (11)
Media 762 (142) 3 (15) 608 (2) (20)
Corporate services 5 – – (4) 1 (80) (80)
Intersegmental (55) 5 - 15 (35) 27 36
Economic interest 11 541 (1 576) (295) 2 554 12 224 22 6
Trading profit(1)
Internet 1 177 (52) (24) 518 1 619 44 38
– Tencent 1 616 (63) (8) 701 2 246 43 39
– Mail.ru 104 (30) 9 (17) 66 (16) (37)
– Ecommerce (543) 41 (25) (166) (693) (31) (28)
Video entertainment 732 (307) – 185 610 25 (17)
Media 22 (6) – 13 29 59 32
Corporate services (30) 3 – 15 (12) 50 60
Economic interest 1 901 (362) (24) 731 2 246 38 18
Other metrics
reported
Development spend(5)
– economic interest 953 (121) – 129 961 14 1
– consolidated 820 (103) – (9) 708 (1) (14)
Consolidated revenue 6 569 (1 263) (80) 704 5 930 11 (10)
Core headline
earnings 1 030 (285) – 501 1 246 49 21
Classifieds revenue 161 (33) 15 74 217 46 35
Marketplace revenue 336 (41) (4) 47 338 14 1
Payments revenue 138 (25) – 27 140 20 1
Etail revenue 1 476 (203) (18) 395 1 650 27 12
Travel revenue 58 (6) – 39 91 67 57
Notes
(1) All figures are presented on an economic-interest basis unless otherwise indicated.
(2) A + B + C + D.
(3) D/A x 100.
(4) [(E/A) – 1] x 100.
(5) Development spend is not an IFRS measure and accordingly does not have a corresponding IFRS equivalent and therefore has been excluded
from the assurance report issued by the group's external auditor.
The adjustments to the amounts, reported in terms of IFRS, that have been made in arriving at the pro forma financial
information are presented in the table below:
Year ended
31 March
2014 2015 2015 2015 2015 2015 2015
A B C D E(2) F(3) G(4)
Foreign Group Local Local
currency composition currency currency
IFRS adjustment adjustment growth IFRS growth IFRS
US$'m US$'m US$'m US$'m US$'m % change % change
Revenue(1)
Internet 5 573 (306) (303) 2 035 6 999 37 26
– Tencent 3 351 (50) (338) 1 334 4 297 40 28
– Mail.ru 236 (71) 6 39 210 17 (11)
– Ecommerce 1 986 (185) 29 662 2 492 33 25
Video entertainment 3 582 (317) - 565 3 830 16 7
Media 829 (70) 15 (12) 762 (1) (8)
Corporate services 1 – – 4 5 400 400
Intersegmental (66) – – 11 (55) 17 17
Economic interest 9 919 (693) (288) 2 603 11 541 26 16
Trading profit(1)
Internet 658 (31) 3 547 1 177 83 79
– Tencent 1 059 (18) (7) 582 1 616 55 53
– Mail.ru 115 (34) 2 21 104 18 (10)
– Ecommerce (516) 21 8 (56) (543) (11) (5)
Video entertainment 841 (29) - (80) 732 (10) (13)
Media 53 (2) - (29) 22 (55) (58)
Corporate services (16) 3 - (17) (30) (106) (88)
Economic interest 1 536 (59) 3 421 1 901 27 24
Notes
(1) All figures are presented on an economic-interest basis.
(2) A + B + C + D.
(3) D/A x 100.
(4) [(E/A) – 1] x 100.
INDEPENDENT AUDITOR'S REPORT ON THE SUMMARISED CONSOLIDATED FINANCIAL
STATEMENTS
TO THE SHAREHOLDERS OF NASPERS LIMITED
The summarised consolidated financial statements of Naspers Limited, contained in the accompanying provisional
report, which comprise the summarised consolidated statement of financial position as at 31 March 2016, the
summarised consolidated income statements, and summarised consolidated statements of comprehensive income,
changes in equity and cash flows for the year then ended, and related notes, are derived from the audited consolidated
financial statements of Naspers Limited for the year ended 31 March 2016. We expressed an unmodified audit opinion on
those consolidated financial statements in our report dated 24 June 2016. Our auditor's report on the audited
consolidated financial statements contained an Other Matter paragraph: "Other Reports Required by the Companies Act"
(refer below).
The summarised consolidated financial statements do not contain all the disclosures required by International Financial
Reporting Standards and the requirements of the Companies Act of South Africa as applicable to annual financial
statements. Reading the summarised consolidated financial statements, therefore, is not a substitute for reading the
audited consolidated financial statements of Naspers Limited.
Directors' Responsibility for the Summarised Consolidated Financial Statements
The directors are responsible for the preparation of these summarised consolidated financial statements in accordance
with the requirements of the JSE Limited Listings Requirements for provisional reports, set out in note 2 to the
summarised consolidated financial statements, and the requirements of the Companies Act of South Africa as applicable
to summary financial statements, and for such internal control as the directors determine is necessary to enable the
preparation of summarised consolidated financial statements that are free from material misstatement, whether due to
fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on the summarised consolidated financial statements based on our
procedures, which were conducted in accordance with International Standard on Auditing (ISA) 810, Engagements to
Report on Summary Financial Statements.
Opinion
In our opinion, the summarised consolidated financial statements derived from the audited consolidated financial
statements of Naspers Limited for the year ended 31 March 2016 are consistent, in all material respects, with those
consolidated financial statements, in accordance with the requirements of the JSE Limited Listings Requirements for
provisional reports, set out in note 2 to the summarised consolidated financial statements, and the requirements of the
Companies Act of South Africa as applicable to summary financial statements.
Other Reports Required by the Companies Act
The "Other Reports Required by the Companies Act" paragraph in our audit report dated 24 June 2016 states that as part
of our audit of the consolidated financial statements for the year ended 31 March 2016, we have read the Directors'
Report, the Audit Committee's Report and the Company Secretary's Certificate for the purpose of identifying whether
there are material inconsistencies between these reports and the audited consolidated financial statements. These reports
are the responsibility of the respective preparers. The paragraph states that, based on reading these reports, we have not
identified material inconsistencies between these reports and the audited consolidated financial statements. The
paragraph furthermore states that we have not audited these reports and accordingly do not express an opinion on these
reports. The paragraph does not have an effect on the summarised consolidated financial statements or our opinion
thereon.
PricewaterhouseCoopers Inc.
Director: Brendan Deegan
Registered Auditor
Cape Town, South Africa
24 June 2016
PricewaterhouseCoopers Inc., No 1 Waterhouse Place, Century City 7441, P O Box 2799, Cape Town 8000
T: +27 (21) 529 2000, F: +27 (21) 529 3300, www.pwc.co.za
Chief Executive Officer: T D Shango
Management Committee: T P Blandin de Chalain, S N Madikane, P J Mothibe, C Richardson, F Tonelli, C Volschenk
Western Cape region – Partner in charge: D J Fölscher
The Company's principal place of business is at 2 Eglin Road, Sunninghill where a list of directors' names is available for inspection.
Reg. no. 1998/012055/21, VAT reg.no. 4950174682
Administration and corporate information
Directors
J P Bekker (chair), B van Dijk (chief executive), C L Enenstein, D G Eriksson, G Liu, R C C Jafta, F L N Letele, D Meyer,
R Oliveira de Lima, S J Z Pacak, T M F Phaswana, V Sgourdos, M R Sorour, J D T Stofberg, H J du Toit, B J van der Ross
Company secretary
G Kisbey-Green
Registered office
40 Heerengracht, Cape Town 8001, South Africa
(PO Box 2271, Cape Town 8000, South Africa)
Transfer secretaries
Link Market Services South Africa Proprietary Limited
13th Floor, Rennie House, 19 Ameshoff Street, Braamfontein 2001, South Africa
(PO Box 4844, Johannesburg 2000, South Africa)
ADR programme
Bank of New York Mellon maintains a GlobalBuyDIRECT SM plan for Naspers Limited. For additional information, please
visit Bank of New York Mellon's website at www.globalbuydirect.com or call Shareholder Relations at 1-888-BNY-ADRS or
1-800-345-1612 or write to: Bank of New York Mellon, Shareholder Relations Department – GlobalBuyDIRECT SM, Church Street
Station, PO Box 11258, New York, NY 10286-1258, USA.
Important information
This report 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 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, 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.
Sponsor
Investec Bank Limited
www.naspers.com
Date: 24/06/2016 05:50:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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