Naspers Delivers Against Strategic Objectives and Is On-Track to Achieve Profitability Target

Naspers Limited ("Naspers") (JSE: NPN): In the second half of the year the group made significant progress in delivery of its strategic priorities, positioning it well for long-term value creation. The ongoing open-ended repurchase programme is creating significant value for shareholders and actions taken in H2 to streamline operations have improved profitablity. The Group has increased confidence in achieving its H1 2025 profit ambition, while continuing to deliver high growth.

Headlines

• Announcement of proposed transaction to simplify the Group ownership structure through the removal of the cross-holding between Naspers and Prosus, allowing open-ended buyback to continue.

• Sustained revenue growth across core segments, well ahead of sector peers
  • Strong revenue growth of 36% across four core segments of Food Delivery, Classifieds, Payments and Fintech, and Edtech (excluding etail)
  • Overall, growth in consolidated Ecommerce revenue was 15%, with strong growth in the core segments partially offset by a decline in the groups consolidated etail business

• On track towards H1 FY25 profitability target
  • Significant steps taken to drive profitability include streamlining operations, cost and headcount reductions and the exit of OLX Autos
  • Margin improvement of 6% in H2
  • Continued targeted investment in high-growth opportunities

• Open-ended buyback programme unlocked US$29bn in shareholder value since launch
  • Buyback has delivered 5% NAV per share growth to date
  • US$10.5 billion of shares in Naspers and Prosus repurchased

• Strengthened and flexible balance sheet provides strategic advantage
  • Central cash of US$15.1bn
  • Bolstered by US$4.7bn Meituan share distribution

Bob van Dijk, Group CEO, Prosus and Naspers, commented: "During the last 12 months we have made good progress across all of our strategic objectives. Against a challenging backdrop, the Ecommerce portfolio has performed well and the open ended buyback programme is driving improved NAV per share. Today we announced plans to simplify our ownership structure by removing the cross-holding between Naspers and Prosus which allows the continuation of the share repurchase programme. There is much more to do, but we are on a good trajectory, we have strong momentum and remain confident in our commitment to achieve profitability in our Ecommerce portfolio during the first half of 2025."

Simplification of ownership structure

The removal of the cross-holding simplifies the group and enables the continuation of the share repurchase programme at the Naspers level.

The transaction will be effected by both Naspers and Prosus issuing capital in their own stocks to existing shareholders. Naspers and Prosus will waive their rights to participate in the respective capitalisation issue of new Prosus or Nasper shares. This will result in:

• Naspers's direct ownership in Prosus aligning to its current economic ownership of 43%
• The remaining 57% ownership of Prosus being held by the Prosus free float, consistent with their current economic ownership of Prosus
• Naspers voting interest of 72% is unchanged and Prosus remains a subsidiary of Naspers

Naspers will remain JSE listed and a South African domiciled and tax resident company. Prosus will remain a controlled foreign company of Naspers for South African tax purposes and retain its listing in the Netherlands.

Group performance

Basil Sgourdos, Group CFO, Prosus and Naspers, commented: "Naspers is on a firm footing to deliver continued value for shareholders. Our Ecommerce businesses are scaling at pace, with sustained revenue growth well ahead of our peers. During the year, we've streamlined our operations and reduced costs. These actions have taken hold, and we've reached a turning point in profitability, with iFood's restaurant business, our Indian payments business and core classifieds all profitable. Our strengthened balance sheet, liquidity and improving free cash flow enable us to continue investing in high growth opportunities and are an advantage in the current environment."

Robust growth and strong execution across Ecommerce portfolio

Consolidated Ecommerce revenue from our four core segments was strong at 36%, partly offset by a tougher trading environment in our etail business to deliver consolidated group revenue growth of 16% to US$4.9bn. Trading losses in H2 decreased by 43% from H1. The established businesses are all profitable and these losses are a result of targeted investment in high-growth earlier stage initiatives such as quick commerce and grocery delivery, credit and innovation in our Edtech segment.

Classifieds ? OLX Group¹: sustained growth and improved profitability in core classifieds

• Core classifieds consolidated revenue grew 15% despite the impact of the Ukraine conflict. Excluding Ukraine revenues grew 20%.
• Trading profit margin, excluding Ukraine, was 19%, a 6 percentage point improvement on the prior year.
• In March 2023, a decision was taken to exit the OLX Autos business, with completion expected during FY24.

Food Delivery: Market-leading revenue growth with meaningful improvement in profitability

• iFood's core restaurant businesses grew Gross Merchandise Value (GMV) by 14% and revenue 24%, leading to a trading profit of US$94m, with an 8% trading margin.
• Targeted investment in grocery and quick commerce drove a 64% increase in GMV from all new initiatives, with revenue up 475%
• Delivery Hero grew GMV by 18% to ?44.6bn on a pro-forma basis and improved adjusted EBITDA margin (as percentage of GMV) by -1.4% (prior period: -2.9%).
• Swiggy grew GMV by 58%, with the business announcing that its core restaurant business turned profitable in March 2023.

Payments & Fintech ? PayU: Strong overall performance, with Indian Payments Service Provider (PSP) business profitable and significant growth in Indian credit business

• Consolidated revenue increased 52% to US$903m as Total Payment Volume (TPV) in the core PSP business grew 39%.
• Indian PSP business profitable, with TPV up 44%.
• Indian credit business grew its loan book by 112% with revenue up 221%.
• Consolidated trading losses of US$83m impacted by a one-off provision of US$23m at Global Payments Organisation.

Edtech: Solid growth in majority-owned platforms, with continued investment impacting segment profitability

• Consolidated revenue increased 21% to US$134m with trading losses of US$131m as a result of investment in technology including AI, and international expansion.
• Stack Overflow grew total bookings by 37% and revenues by 20% and GoodHabitz grew enterprise customers by 18% and revenue by 24%.

Phuthi Mahanyele-Dabengwa, South Africa CEO, Naspers, commented:

"Our local businesses continue to grow and innovate, reflecting the evolving consumer needs they fulfil and the immense potential of technology to shape South Africa's economic landscape. We recognise the important role of private-public collaboration in driving inclusive growth and we are committed to playing our part by enabling local businesses, supporting supply chains and employment through our South African platforms".

South African businesses

• Takealot group grew GMV by 13% and revenue by 12%, with strong performance at Mr D, where GMV grew 11% and revenue was up 17%.
• Media24 delivered revenue of US$207 million, with a trading profit of US$5m, despite investment in ecommerce infrastructure.

Naspers Labs: equipping young South Africans with digital skills, job readiness training, and employment opportunities.

• To date, Naspers Labs has trained 3 956 young people in various tech roles such as cyber security, data science, software development and AI, among others.
• Through its extensive network of partners, 3 920 youth have been placed in tech and tech-enabled jobs and supported 33 micro entrepreneurs.

For full details of the Group's results, please visit www.naspers.com.

About Naspers

Established in 1915, Naspers has transformed itself to become a global consumer internet company and one of the largest technology investors in the world. Through Prosus, the group operates and invests globally in markets with long-term growth potential, building leading consumer internet companies that empower people and enrich communities. Prosus has its primary listing on Euronext Amsterdam, and a secondary listing on the Johannesburg Stock Exchange and Naspers is the majority owner of Prosus.

In South Africa, Naspers is one of the foremost investors in the technology sector and is committed to building its internet and ecommerce companies. These include Takealot, Mr D Food, Superbalist, Autotrader, Property24 and PayU, in addition to Media24, South Africa's leading print and digital media business.

Naspers has a primary listing on the Johannesburg Stock Exchange (NPN.SJ) and a secondary listing on the A2X Exchange (NPN.AJ) in South Africa and a level 1 American Depository Receipt (ADR) programme which trades on an over-the-counter basis in the US.

For more information, please visit www.naspers.com.

Naspers Labs

In 2019, Naspers Labs, a youth development programme designed to transform and launch South Africa's unemployed youth into economic activity, was launched. Naspers Labs focuses on digital skills and training, enabling young people to pursue tech careers.

Response to Covid-19

Naspers contributed R1.5 billion of emergency aid to support the South African government's response to the COVID-19 pandemic. This contribution consisted of R500 million towards the Solidarity Fund and R1 billion worth of PPE sourced and distributed to South Africa's front-line healthcare workers. In addition, Naspers contributed R6.9 million to the Nelson Mandela Foundation's EachOne FeedOne programme to support families who COVID-19 has impacted with meals for a year.

¹ In May 2022, the group announced an intention to exit Avito. The disposal of Avito was concluded in October 2022. Avito is now treated as a discontinued operation in the financial results.