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 ʼn 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 dividendsThe 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 directorsDuring 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
moreApart 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 FictionAldré Lategan, Publisher Children's books at NB
PublishersTim 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 NaspersLooking 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.
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.
NaspersMeloy HornHead of investor relations+27 11 289
3320+27 82 772 7123meloy.horn@naspers.com
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