Naspers Limited

Meloy Horn - Head, Investor Relations Bob van Dijk - Chief Executive Officer Basil Sgourdos - Chief Financial Officer Mark Sorour - Chief Investment Officer Jim Volkwyn - Chief Executive Officer, PayTV Charles Searle - Chief Executive Officer, Listed Internet Assets Martin Scheepbouwer - Chief Executive Officer, Classifieds Larry Illg - Chief Operating Officer, e-commerce Nico Marais - General Manager, Finance

Jarrett Geldenhuys - Investec JP Davids - Barclays Chris Grundberg - UBS Edward Hill-Wood - Morgan Stanley Alex Balakhnin - Goldman Sachs Ziyad Joosub - JPMorgan Craig Hackney - Noah Capital Markets

Thank you very much and thank you everyone for dialing in today. I just like to introduce the management team representing us on the call today.

We have Bob van Dijk, our CEO; Basil Sgourdos, the CFO; Mark Sorour, CIO; Jim Volkwyn, CEO for PayTV; Charles Searle, CEO for Listed Internet Assets; Martin Scheepbouwer, CEO for Classifieds; Larry Illg, the COO for e-commerce; and Nico Marais, GM, Finance. To start the presentation, I would like to now hand you over to Bob van Dijk.

Thank you.

Thanks, Meloy and thank you for joining the first half financial year 2015 results call. So, I will start off by giving you an overview and some context for our results and afterwards Basil Sgourdos will take over and talk to the financials.

So, you move to Slide 4, you will see our plan and our results are shaped by five main factors. First of all, e-commerce is a major area for growth for our business going forward.

Second, mobile is becoming the dominant mode of access to all our online products in our key markets. Third, we are investing primarily in markets that have above average growth potential.

Fourth, our priority e-commerce formats, Classifieds and etail are growing faster than average e-commerce everywhere. Finally, we are optimizing a structure to drive consistently high returns of our investments across the globe.

Slide 5 shows our focus on e-commerce that allowed Naspers to be a leading player in e-commerce audiences. So, we are now the third largest player in e-commerce audience in the world.

We have overtaken many players in the last few years. We are smaller now only than Alibaba and Amazon and our growth rates are actually higher than many others.

Obviously, a caveat of this data is that its comScore data and it shows desktop Internet only and that’s a major limitation in our mobile edge. However, if you look at mobile Internet, we are at least as well positioned or even much better positioned and that’s illustrated by the following slide.

So, Slide 6 illustrates our focus markets are generally very well-positioned for mobile Internet growth. So, growth in mobile Internet users in mature markets like the U.S., Europe and Japan is going to be quite limited in the next 4 years, what mobile Internet users in our growth markets is already larger than it is in mature markets today and expected to grow significantly.

In fact, the additional number of mobile Internet users in the next 4 years in our markets is expected to be larger than the overall mobile Internet population in mature markets in 2018. So, if you look at app rankings on the right hand side of the slide and this is from the Google Play Store in the shopping category, you see in a number of core markets, our apps are some of the most used in the mobile Internet today.

So, as an example take bottom right, take India, there we have three out of the top five mobile apps in that country and that country is soon going to be the second largest Internet market in the world. And we believe that positions us very well to benefit from further mobile Internet growth.

And Slide 7 shows how we are putting our money where our mouth is. It shows our M&A spend as well as our development spend broken out by country.

As you will see, we are putting our investments in very populous countries, where mobile Internet is showing the most promising growth rates and our M&A investments here are obviously influenced by significant recent investments in Flipkart. And Slide 8 shows the reason why we are prioritizing Classifieds and etail when we invest in e-commerce.

So, both these segments have very strong traction with consumers and it’s illustrated by the growth in market share of total e-commerce visits in our markets. So, you will see in the last 2 years, etail grew its market share of total e-commerce visits from 12% to 18%, that’s a 45% increase, while Classifieds grew its market share of total e-commerce visits from 32% to 38% and that’s a 20% increase from an already significant base.

And as you will see in Slide 9, as a result of our investments in Classifieds, we now have a portfolio, which is very well-positioned in the most populous markets across the globe. So, what you see here is the top 15 markets in terms of population in the world and in 10 out of those top 15 countries, we have the leading Classifieds property, in some cases to our associates.

And the recent transaction that we announced a few weeks ago with Schibsted has solidified our position in key markets like Brazil, Indonesia and Bangladesh. And as you will see in Slide 10, we are working to ensure consistently high ROI of our investments across the portfolio.

And we have taken a number of actions to ensure this in the last few quarters. So we have introduced a significant optimization program in our Eastern European businesses to make our organization significantly leaner.

Furthermore, we engaged in M&A activity to better position our assets for ROI, most notably the merger that we announced in Kalahari and Takealot in South Africa and the sale of a number of e-commerce and MWEB infrastructure assets. And it’s important to call out that besides these optimizations, we have invested significantly in strengthening our leadership talent across all these businesses.

So I will now hand over to Basil Sgourdos, our CFO who will take you through the financials.

Thank you, Bob. Well, I am not going take you through the financial highlights.

You will find a lot of information in the interim results report we released earlier today as well as in the appendices to the slide deck that you currently have in front of you. If you could all please turn to Slide 12, here we show you the customary financial snapshot.

These are consolidated numbers and that’s the revenues do not include our proportionate share of associate revenues. Consolidated revenues at ZAR34.4 million have grown 20%.

The growth is substantially organic. E-commerce is our fastest growing portfolio.

PayTV has also shown good growth year-on-year. Our consolidated development spend has increased 35% to ZAR4 billion.

You will see in later slides that on an economic interest basis, the increase is larger. Incremental investment in our fast growing e-commerce segment drives the year-on-year growth.

The additional spend comes on the back of market expansion in Classifieds and scaling of our etail and payment businesses. I remind you that core headline earnings is what we consider the best measure of our sustainable operating performance.

As we strip out once-off events and technical clatter core headline earnings increased by a solid 24% to ZAR6.1 billion. And on the graph in the bottom right you will see that core headline earnings per share is up 22% to ZAR15.28.

Tencent’s strong financial performance has been a significant contributor, as well as the growth from our profitable e-commerce businesses and PayTV. So moving on to Slide 13, we now show you the breakdown in revenue in more detail.

Please note these numbers are on an economic interest basis, so therefore include our proportionate share of associate revenues. Looking at the top graph, you will see that the Internet segment remains the fastest growing segment by a substantial margin.

As mentioned in the prior slides revenue growth for the period is largely organic and stood at ZAR11 billion. Currency is about ZAR3 billion of impact.

E-commerce has delivered a strong performance, growing 43% year-on-year. We are particularly pleased with the accelerated growth we are seeing in etail, which is growing 65% year-on-year, classifieds at 52% and our online services segment at 50%.

With the Schibsted transaction and the resultant merge of our some of our classified properties in Latin America and Southeast Asia we will be able to deliver more compelling consumer experience, which we hope will deliver improved monetization opportunities in years to come. Tencent’s revenue engine remains very strong.

We are particularly encouraged by the progress they are making on mobile. With the JD transaction e-commerce revenues are lower year-on-year as these are not built within JD which Tencent now equity accounts.

The growth in the core is more than compensating for this impact. There was an 8% currency impact in the 46% year-on-year number we quote on the right side of the slide.

This is due to the weakening the course of the rand versus the renminbi. We have seen good growth in our DTH business across the African continent, which is in line with our expectations.

This has been the primary driver of the 18% year-on-year increase in PayTV revenues. Growth could have been more significant had delays in the analog switch off not occurred.

Jim will tell you more about this later in the presentation. Our print businesses faced similar structural challenges to those we see elsewhere in the world and that’s growth is muted in terms of top line.

We are investing in building our digital products and some e-commerce initiatives within Media24 while Paul Media Group continues to build additional sources of revenue outside of the newspaper and magazine printing. We will need to continue to manage costs very tightly in this segment.

So, if you look at the bottom right, you will see that growth of 30% in revenues to ZAR62 billion is roughly in line with the full year CAGR that we have delivered. Then on the bottom left graph, you will see that the Internet share of total revenues stood at 58%.

This was 52% a year ago. Superior growth rates in the Internet means that we will continue to make up bigger part – that the Internet segment will continue to make up a bigger part of our total revenues going forward.

It’s also important to note that 72% of our revenues measured on an economic interest basis are now sourced outside of South Africa. So, moving on to Slide 14, we breakout the components of development spend.

Please note that again here we are presenting the numbers on an economic interest basis. This is the first time we are doing this.

We have a number of non-maturity owned e-commerce businesses, particularly in the etail space that are investing and developing and scaling their businesses and running at a loss and we thus need to capture this impact in our development spend numbers. E-commerce development spend measured on an economic interest basis increased by ZAR1.2 billion driving the total development spend for the first half to ZAR4.4 billion, that’s a 42% increase year-on-year.

The key drivers of the increase are in the second half of last year, we took a decision to expand the number of focused markets in Classifieds. We have the full impact of that decision now with us in the first half of this year.

Our etail business has continued to invest in logistics fulfillment, selection and remain price competitive as they drive for scale, then we are investing in scaling our payment businesses, and lastly some currency also comes into play as most of the spend is not incurred in range, but in other currencies and the ranges generally weakened between 8% and 12% versus those currencies. Development spend in PayTV remained fairly steady year-on-year and was primarily focused on developing our online services and products as well as DTT.

Once the analog switch-off commences, we would see a further increase in DTT development spend during the switch-off period. On our last investor call, we spoke of an increase of 15% for the current financial year on a consolidated basis and we remained largely on track to deliver this.

Of course, if the rand continues to remain weak, then the increase could be a bit higher. Also, if the analog switch-offs happen sooner that could also impact the member.

On an economic interest basis, the increase could be between 18% to 20%. In the steady state, development spend on a consolidated basis for the second half of the year will largely be in line with the actual spend for the second half of last year.

The recently announced Classifieds consolidation will not have a significant impact on the current year’s development spend numbers. We still need to get the necessary regulatory approvals to complete the transaction and then we actually have to get together and consolidate our businesses.

We expect meaningful savings in the consolidated markets in years to come. So, moving on to Page 15, we shall use the summarized consolidated income statement.

If we isolate impact of currency and we report the numbers on a constant currency basis, we will see that growth is 24%. You have discussed development spend of the revenue growth trends in prior slides.

The higher development spend as well as the investment in content on our PayTV business drives the drop in trading margin. Our finance costs have increased as we have grown our facilities to fund acquisitions.

The largest in the current period was $250 million follow-on investment in Flipkart. Total investments for the first half of this year were roughly $370 million.

There was further drawdown of some debt facilities during the course of last year when we invested $465 million. The bulk of which went into Flipkart, Souq and the acquisition of Redbus in India.

So that combination of acquisitions has resulted in higher debt and therefore higher interest charge. Our finance costs are U.S.

dollar denominated. The rand is 9% weaker versus the U.S.

dollar year-on-year, which also drives part of the increase in the finance costs. Then moving to the equity results line, you will see the large increase in equity accounted results includes the impact of the Mail.ru acquisition of the remaining shares in VKontakte and the sale of its shares in Qiwi as well as some small disposals from Tencent perking ZAR4.8 billion.

There were similar book profits of ZAR1.3 million in the prior year. When you reverse these once-off impacts up, you will actually see that the growth year-on-year is very strong and it’s driven by improvements in Tencent and Mail.ru operating performance.

And this was partially offset by the increased development spend in Flipkart, Souq, and [indiscernible] and other e-commerce associates. Please note that we no longer equity account for [indiscernible].

It is important for you to note that while we account for associates on a 3-month lag basis, we are required to pick up the impact of large transactions in the intervening period. In the full year results for last year, that’s the year end of 31 March, 2014, we picked up once-off impacts from Tencent’s transaction with JD.

These items are not thus included in the current year figures and also have no impact on core headline earnings. So we ask the analysts to look at the models carefully to ensure that they have correctly dealt with us.

We are paying more tax in Africa and in South Africa as profitability improves as well as in Latin America and Eastern Europe where we have profitable e-commerce businesses. Moving to Slide 16, we will show you the core drivers of core headline earnings.

The waterfall drop shows a very strong increase in core headline earnings of ZAR1.2 billion or 24%. It is important to note that we have an increasing number of profitable businesses in the e-commerce segment including our marketplace in Poland, our price comparison business globally and the number classified verticals and some horizontals including the Dubizzle in the UAE.

They together delivered an incremental ZAR588 million in profits and year-on-year which is higher than the number actually delivered by PayTV for the first time. The other core contributors are the ZAR564 million from PayTV and then Tencent as I mentioned earlier.

These are offset by the high development spend on the tax and interest expense we discussed in the prior slides. I would like to caution that in the second half of the year we see increased spend as we capitalize on the Christmas season while in the fourth quarter of the financial year most of our investment in classifieds occurs.

Our associates are spending to capitalize on the holiday season as well and developing new products and services. PayTV content costs are also traditionally higher in the second half of the year.

As such the full year earnings growth may not be as strong as you have seen for the first half of the year. Moving on to Slide 17, we show you the investment – we will show you our free cash flow.

The free cash flow is – is a net after ZAR429 million as a result of the high development spend and taxes which I mentioned earlier. CapEx is somewhat lower as our DTT footprint is now largely built up.

We are investing in building up local production facilities in Nigeria and Kenya and expanding our South African facility. The Classifieds consolidation, lower PayTV CapEx on the back of completing the build out of our facilities and our e-commerce business continued to scale stood in the steady-state resulting in improved cash flows in the years to come.

And then finally on Page 18, we show you our balance sheet and we show you that the net gearing position is currently at about 29%. That’s marginally up from the 22% at the end of the previous financial year.

Our overall debt levels remain low with closing net debt at ZAR22 billion, which is more than 24 times covered by our investment in listed assets. So, folks that concludes the financial highlights.

And I am going to now hand you over to our COO of e-commerce, Larry Illg who will take you through the e-commerce highlights.

Thanks Basil. I will now discuss the performance of our e-commerce portfolio.

I would like to start by highlighting just a few of the key metrics we track across the various e-commerce segments. We will get more into the details of segment level performance shortly but you will know the solid growth in our etail segment highlighted by etail gross merchandise volume growing faster than traffic.

That is a sign of increasingly healthy set of etail businesses and the ongoing development of broad consumer destinations. Martin will discuss classifieds in a moment, but you can see that we have a sizable classifieds footprint of over 220 million monthly users.

We are increasingly focused on mobile illustrated by 345% growth in new classified listings via mobile devices. Listings inventory has always been the lifeblood of Classifieds and mobile listings are an increasingly significant part of our Classifieds businesses.

Our Classifieds team is executing very well in general, but especially so in that regard. In our marketplace of businesses operating mostly in Central and Eastern Europe and highlighted by the Allegro business in Poland continue to process a sizable transaction volume.

Moving to Slide 21, as Bob and Basil mentioned earlier, we continue to invest in platforms that attract an increasing share of consumer interests, primarily etail, Classifieds and payments. That investment is bearing fruit and fueling our growth.

Creating world-class consumer experiences continues to be at the core of our values and we have made significant investments in technology and talent to drive consumer satisfaction and engagement. We are also getting much stronger operationally driving efficiencies in our businesses as they scale.

Some financial results you see here suggest that our formula is working. Half year revenue for e-commerce grew 43% over last year to just over ZAR12 billion.

Shifting to our etail segment on Slide 22, you see the scale of our global operations. We currently operate etail businesses in 19 markets under 11 unique brands.

As mentioned earlier, this portfolio is growing visitors 39% year-on-year. This growth is almost entirely organic.

At a 59% growth rate, GMV is growing much faster than visitors. Average transaction size is growing, meaning users are increasingly confident transacting online and buying on our platforms.

We are seeing solid growth in repeat visits suggesting consumers are happy with the overall experience we offer. On Slide 23, you see more details about our performance in the etail segment.

While we have expanded our brand and geographic footprint over recent years, the organic results are truly impressive. We have been able to maintain and in many cases accelerate revenue growth rate, something hard to pull off at our scale.

Many of our businesses are growing at a faster rate now than they did prior to our ownership. Solid execution has enabled revenues to grow 65% to ZAR6.6 billion.

We attribute this growth to a number of factors, but as always it starts with consumer experience. The ability of our businesses to leverage global best practices and significant investments in new talent and technology were in special mention.

Speaking to the performance of specific assets, Flipkart’s growth rates have accelerated significantly driven by an intense focus and investment in the pillars of consumer experience, price, selection and convenience. Following the same consumer-centric mindset, Souq in the Middle East and eMag in Eastern Europe are also scaling nicely and growing faster than our overall portfolio.

The fashion businesses, Markafoni and Fashion days have dramatically cut losses and improved consumer experience. And as Bob discussed earlier, the proposed merger of Kalahari and Takealot will place those businesses on much better economic footing.

As you can see, we have a lot of reasons to be excited about our etail portfolio. I will finish with Slide 24 that shows our payments business, PayU.

It is still early days for PayU, but we have currently have presence in 18 markets and are investing in technology and building the global team. You will note that the geographic footprint for PayU closely mirrors the footprint for the rest of our transactional e-commerce portfolio that is not a coincidence.

There are strong synergies between e-commerce and payments globally. We believe that will be even more true in our markets, where both e-commerce and payments are in the infancy and consumer behaviors are still being shaped.

There is still a lot of work to do, but we are happy with the progress and potential of the PayU business. Now, I will hand over to Martin who will speak about performance of our Classifieds segment.

Thanks, Larry and good afternoon everyone. So, starting on Page 25, let me elaborate on recent events.

We are very excited about the partnership we started with Schibsted, Telenor and Singapore Press Holdings. This will allow us to accelerate our growth trajectory in Classifieds by creating strong joint ventures in four markets.

Schibsted is a respective competitor and they have shown willingness to significantly outspend us in several markets. While we have been able to hold our ground based on execution or excellence, we both felt teaming up was the right thing to do in order to capture the future value of these nascent markets thoroughly.

So, [indiscernible] markets will both create a single largest platform, which will be really beneficial for consumers as liquidity will go up. In addition, we will work with Schibsted to develop these markets further sharing expertise and cost in this area.

Pending regulatory approval we expect is due to close early next year. So, moving on to the next slide, it is apparent how the partnership we start with Schibsted will further solidify our OLX brands.

It is already the largest brand in online classifieds with around 200 million monthly users across 40 countries. And with this partnership, it will emerge as the clear leader in two very important ones, namely Brazil and Indonesia.

On Slide 27 is shown how mobile has transformed our business. So, after we decided to increase our commitment to Classifieds, we have put tremendous focus on operational excellence among five dimensions: mobile products, preaching consumer-to-consumer classifieds, measuring the details, overcoming local pain points and building strong local keys.

And mobile is a blessing for our business. Aside from giving millions access to Internet for the first time, it’s also made the use of trading platforms, such as ours much easier.

Think of frequency of use, picture taking or arranging to meet up with somebody you do not know. And we anticipated this trend early by moving to mobile and we put it at the center of everything we do from last year onwards.

The ensuing massive growth we have seen across the board illustrated ever more uses with lot of our products. Let me now take you to India on Slide 28, probably the market with a largest untapped potential for us.

India as a nation yet exploding Internet market, almost purely based on mobile. The primary opportunity here is to educate and activate the market, especially new Internet users.

And in doing so, our task is to grow faster than anyone else thereby creating the largest and the most efficient platform available. And the way we track our relative performance is by looking at liquidity in the form of new listings and listers, especially in regular goods for sale, brand awareness and mobile presence.

And based on these metrics, we are confident to be in the right track for sustained leadership. Please turn to Slide 29.

In parallel to executing in some of the markets we talked about, we have significantly scaled up our global presence over the last 2 years. And to do this efficiently, we have developed a playbook, which allows us to launch a new market in a matter of weeks.

We use official product solutions, existing improvement processes and marketing, while leveraging our global scale and people and offices. And using this approach, we entered 16 new markets last year, many of which have moved on to become market leaders.

And this year, we have again opened up 5 new markets, which have been off to a promising start. I will finish with Slide 30.

So, in summary, the combination of focus on execution and scaling up aggressively has led to a fantastic asset base for growth as shown by Bob earlier. The recent deal with Schibsted will build on this strategy and make us even stronger.

Thank you for your attention. I will now hand over to Charles Searle.

Thanks very much, Martin. I will now take you through a brief feedback on Tencent and Mail.ru starting on Slide 31 with Tencent.

Now, Tencent’s financial results as you may recall are reflective to Naspers’ accounts on a 3-month lag basis. And so I encourage you to visit the Tencent website for details of the interim results, which were released in August and their third quarter results for 2014 which were released earlier this month on November 12.

For the six months period to June 30, Tencent recorded really excellent year-on-year growth in both revenues and earnings. And as you can see to the right of the chart, operating profit was up 62% year-on-year at RMB15.6 billion.

Now, there are three drivers of this profitability growth that I would like to call out. Firstly, as Basil mentioned, the strategic partnership with JD.com has been successfully implemented.

And once this has led to a decline in Tencent’s e-commerce revenues, it has also resulted in the sharp decline in costs, which has boosted overall profitability. Secondly and in a relatively short space of time, Tencent has boosted significant revenue base from smartphone games and has established a strong market position in mobile games publishing.

And then the further highlights has been the strong growth of Tencent’s online advertising business, which has benefited from the increased traffic to the Tencent’s video platform as well as the FIFA World Cup that was held in Brazil earlier this year and performance-based advertising on its mobile social platforms. Now, this growth in profitability has been achieved against the backdrop of continued investments in new opportunities and a further acceleration in the transition of the company towards mobile for OLX platforms and services.

And in particular, Tencent has been working very hard to enrich its online to offline ecosystem and this is included making strategic investments in several companies, including classified listings companies 58.com and mass service provider NAP Info. From a platform perspective, the smartphone-based social communication product Weixin, which is known internationally as WeChat, registered the combined 468 million monthly active users in accounts in September 2014 to the end of the third quarter, which is a 39% increase year-on-year.

And this rapid growth was benefited from the launch of several new services and features during that period. For QQ instant messaging, smart device monthly active users increased by 36% year-on-year to 542 million at the end of the third quarter.

New lifestyle services such as including shopping, restaurant, office and health monitoring, we integrated into this mobile QQ platform to further strengthen its usefulness to its user base. So overall, it was another excellent performance from Tencent.

Now turning to Slide 32 on Mail.ru, similar to Tencent, Mail.ru’s results are reflected in the Naspers’ accounts on a three-months lag basis. Now I refer you to the Mail.ru corporate website for the half year results and a quarter three trading update, which was released at the end of October.

For the six months period to 30 of June, Mail continued the positive growth trajectory albeit at a slower pace especially during the second quarter. And as I think you know Mail is encountering some headwinds as a result of the tough economic and geopolitical environments in Russia.

And this has had a dampening effect especially on display advertising revenues. Against this backdrop, however, total revenue grew 21.7% year-on-year on rubles, but EBITDA increased by 20%.

Margins remained stable which is EBITDA margins at around 52%. Mail continues to execute on its MMO Game strategy which has proved to be very successful over the last few years.

Warfares as previously mentioned remains the largest revenue generating game and the overall games pipeline remains strong, and in the coming months, there are several major new games that are scheduled for release which we should see coming on us. And then in late September, Mail.ru acquired the remaining 48% of VKontakte that did not already earn, and this is for consideration of $1.47 billion.

Mail.ru retained VKontakte as a standalone brand that will be looking to leverage the wider mail group expertise and Internet value added services and advertising. So in summary, the overall structural drivers of the business remains unchanged.

I will now hand you over to Jim Volkwyn who will take you through the PayTV results.

Yes. Thank you, Charles.

Our Pay Television strategy to deliver paid for content to all platforms remains unchanged, albeit that some of these initiatives come with the short-term cash flow and development cost paying. Looking at Slide 34, we now service 8,4 million subscribers across the continent with nearly 5,2 million subscribers in South Africa and another 3.2 million spread throughout the various countries in Sub-Sahara and Africa.

Year-on-year, we experienced growth of some 1,14 million subs made up of 475,000 in South Africa and about 670,000 subscribers from the rest of the continent. The net growth for the six months ended September 2014, was 340,000 subs made up of 166 in South Africa and 174,000 from the rest of the continent with limited growth of 56,000 from our digital terrestrial operations.

Our heavy emphasis on reinvigorating our content line-up particularly localized content continued. We are seeing I must say a positive result from this ended up channels on which our local content is broadcast, are increasing strongly in their ratings.

Going forward, we will continue with this localization initiative. Now, on the positive side of the business, high-definition channels can now be viewed on all bouquets.

So, if your decoder is a high-definition decoder, you can pick them up. These high-definition services are no longer limited to the premium tier.

Our video on-demand box office service is now available in seven countries and exceeds 600,000 rentals per month. And we are very excited that we have just launched our connected Explora personal video recorder which had 5,000 connections in the first two days and allows premium subscribers to view an extended catch-up service with deeper content downloaded over the Internet for free.

And of course, much emphasis has been placed on improving our customer care with dramatically increased service levels. Now, on the negative side, regulatory pressures have intensified strongly in most of our territories.

Satellite competition has increased significantly across the continent and for the moment in South Africa over the top Internet-delivered services with a number of new incumbents. And margins have decreased due to additional local content spend, increased sports rights fees is a direct consequence of competition, content costs and digital terrestrial expansion.

Moving onto slide 35, we have increased our digital terrestrial rollout infrastructure to 142 broadcast sites in the 11 countries where we had the digital terrestrial infrastructure with the resulting development cost increase year-on-year from ZAR379 million to ZAR465 million. Despite this digital terrestrial growth predictions did not meet our expectations, which were hampered by regulatory issues including the late analog switch-off dates.

Our digital terrestrial plans in Zimbabwe were put on us, post launch following a government shutdown of our service and we have not launched our digital terrestrial service in Sierra Leone despite the network being ready to do so, due to the outbreak of Ebola. The speed at which future digital terrestrial subscribers will be added, will depend largely on the mandated analog switch-off dates, determined on a country-by-country basis.

For now though, we believe it’s a timing issue which will result itself once analog switch-off dates are finalized and it will be then a rush to the finish. The analog switch-off date in South Africa is embroiled with regulatory concerns surrounding the necessity for encryption in the set-up box and until resolved, unlikely to make useful progress.

So, I will now hand you back to Bob.

Thank you, Jim. So, if you move to Page 38.

Looking forward, we will keep our focus on growth, on scale and on return on investment. So, in e-commerce, we will continue to scale our known segments etail and payments in high mobile Internet growth geographies in particular.

We will accelerate our development in classifieds and that will be helped by our recent consolidation. Our mature e-commerce businesses will continue to focus on growth but as well on profitability.

In PayTV, we will accelerate our investments in online TV content delivery by video-on-demand and other connected online TV experiences. In sub-Saharan Africa, we will prioritize capturing the DTT opportunity as Jim told us about.

And we will ensure that our more mature TV businesses run efficiently and deliver profit. As a result, we expect revenue growth to remain strong with development spend somewhat higher in the second half of the year.

And with that, I want to thank you for your attention so far and open up to the group for questions.

Thank you very much for the opportunity. Guys, my first question really relates to etail, and if I look at all the metrics, it seems to be very positive progress has been made.

The one question I would have is on etail in Europe. It looks like in my calculations that's it’s flat just slightly negative in terms of a rand number, is there a possibility, the way I will get to that is affectively just looking at your revenue at ZAR6.6 billion and then just adjusted for GMV percentages.

So, hopefully you can comment on that from the GMV gone to about 40% from 70% in the last year from Europe. And then the second question relates to the Classifieds and page views again, just to try and get the remainder on the year-on-year changes, it looks like you are not disclosing 11 billion monthly views, which works at about ZAR366 million per day.

And on last year’s metrics, it looks like that could have been about ZAR429 million, the comparative number. So is there anything under those numbers, aren’t exactly comparable.

But is that trend obviously negative, is there anything that we should – first of all, was that wrong or is it anything else we should be concerned every minute? Thanks very much.

Okay. Thank you very much.

If I may comment on your first question, so I can’t necessarily comment on how you calculated the etail Europe growth rates, but the conclusion is not correct. So our etail businesses in Europe are growing very strongly, the major ones in particular are growing at around 50% mark.

There is our fashion businesses we are managing those more for profitability at this point in time. So, they are slowing the growth down somewhat, but our key etail business in the EU, are growing very significantly across the board faster than last year.

Yes. And it’s Martin here, I can comment on the second question.

So, indeed on Page 26 and this is an abstract of more recent press clipping, we indicate we have about 11 billion monthly page views and that’s up substantially from last year in line with things like visit growth. So, no, this is not going down, this is going up substantially.

Just to add to Martin, this covers only OLX. Last year’s number covered all our classified properties.

Thanks very much. That’s very useful.

Hi, there. I have got two questions on e-commerce please.

The first one slightly broader question which relates to your associates in the e-commerce space, are you comfortable and that, that you have enough influence and I guess guidance over the strategy to deliver on what Bob concluded with, which is driving scale, growth and ultimately ROI? And then separately, a slightly more detailed question, on Slide 27, you provided how mobile is transforming your businesses and there are some notable inflections there, particularly in Brazil in around June 2014 and in Nigeria around August 2014.

Is anything specific that happened in those markets over those periods that drove that inflection in mobile traction? Thank you.

Thank you. If I may address the first question that you post which is around influence we have on our associates, particularly in etail.

So, I would say and we believe strongly in empowering local teams. And if you take the Flipkart or the Souq teams, they run an excellent operation.

They have a lot of confidence in them. And I think we are very aligned and very engaged in strategic discussions, particularly on how to reach scale very rapidly.

I think the acceleration in growth rates that these businesses have pursued is very much on base of a joint understanding and that’s getting to scale fast is essential in these businesses.

Yes, it’s Martin here. I can help answer the second question.

And what you see on Page 27 is the result of putting mobile first in everything we do and particularly event around the June-July period this year was the launch of a new Android app, which was very successful in converting traffic to new listings.

Thank you.

Yes, thanks. I just had a couple of questions actually.

The first just for a second clarification to Basil maybe I think you mentioned in your section that full year core HEPS growth may not be as strong as it was in H1, can you confirm that’s what you meant, i.e., that in percentage terms the full year core HEPS might grow below the rates you are driving in the first half? That was the first one.

And then I guess the second one, just I mean you mentioned in the release, I have the price comparison businesses is going well and made some points around profitability. I know that obviously had some very unique features in the Brazilian market, but I just wondered in terms of expansion prospects for that whether there were any other markets you have identified as being particularly exciting or where you might see similar growth or similar opportunities?

Thanks.

Okay. So, the message that I am saying is getting around core headline earnings is that we have delivered 24% growth for the first half of the year.

And for the full year, we don’t think it’s going to be as high as 24%. And the reason for that is as you have seen, over the past 5 years or so, our business traditionally spent more in the second half of the year as we acquired new customers.

We also have higher PayTV content costs as we have the Big Seasons. As to your second question on price comparison, remember we are the biggest price comparison business globally.

We don’t ultimately operate in Brazil we operate in Central and Eastern Europe as well. And the whole – the entire segment is actually profitable, including the businesses in Central and Eastern Europe.

Thanks. And just in terms of are there further markets that you were looking at or that you thought there were certainly increasingly exciting opportunities or you think you are in the footprint that you need for that business out?

I think we will evaluate our position over time. We have a presence in South Africa as well.

I think that is growing nicely in its key destination, but we will evaluate going forward what the right footprint is for us.

Great, thank you.

Hi, good afternoon. Thank you very much.

I have got three questions maybe if I just ask them one at a time. First one just on Brazil, can you comment on the competitive landscape and how it might have impacted on your decision to joint force to the Schibsted, especially in the context of the likes of an eBay’s activities there also seen some Australian players getting a bit more aggressive in the verticals as well?

Can you comment on how that’s unfolding and what you are seeing from these competitors?

Yes, hi. It’s Martin here.

I think Page 27 says it all. In Brazil, we have been able to execute extremely well, especially on mobile and that put us in a good position to negotiate its partnership which we believe is the right way to capture the value of nation markets early.

Yes. And if I may add, there is certainly other formats in the Brazilian market that have certain traction in e-commerce, so B2W plays in etail and I think this is doing that with some success.

Mercadolibre has a position as a marketplace in the Brazilian market. So, I think we together with Schibsted have now a very strong position in Classifieds, but there is other formats that are active in Brazil.

Thank you very much. My second question is also on Brazil, I understand that Schibsted has got a separate job vertical in that market.

I mean, how does that factor into the tie-up? Is it a part of the tie-up?

Is it going to operate as a separate competitor? What happens there?

No, that’s not included in this deal.

Sorry, I didn’t catch that.

That InfoJobs in Brazil is not part of this deal.

That’s not part of the deal. So, it’s going to be a separate competitor against the tie up?

Yes.

Okay. And then just a similar question on Indonesia, just in terms of the objectives there obviously with the type of Schibsted, how do you reconcile that with Tencent’s ambition in that market, how is that being managed?

So, Tencent are busy building out WeChat and so forth. They are not in the classified space.

We sometimes use each other’s platform to co-promote and...

Sorry, I didn’t get that last part.

Yes. We use each other’s platform sometimes to co-promote.

So, we encourage people to use WeChat to contact each other around the classified space and vice-versa, but they are in the separate space to the one we are in.

Yes. I think generally we are very well coordinated with Tencent on markets that we approach and segments that we operate in.

I understand that 701 Search has got some social network exposure, is that incorrect or?

I am unaware of what they do in social network.

Okay, thank you.

Yes. Good afternoon, everyone.

I have got two questions. Two things on the statement, firstly, thing which surprised me with the new disclosure over the amount of money spent in Brazil and India of course Indonesia as well in terms of development spend.

It was significantly less than I was expecting which is, it shows that you are executing rather than outspending people, which is great news. But does it mean that potentially you are going to make less savings than your new partner from these JVs next year or does it mean that you need to make – you need to monetize faster to make the economics of the JV work?

And the second question relates to Allegro that business looks as though it’s really doing well both on the top line, the restructuring and the margins, are we getting closer now to a Allegro spin-out?

As I will deal with the first question, I think Martin was quite clear in his presentation that we weren’t spending at the same pace. And you are absolutely right, it goes to our core philosophy, we don’t buy share, we built great products and services.

So, yes, I will correct that, I know there is a number out there that Schibsted has put out. We are not going to be saving in that magnitude on an annual basis, because we weren’t spending at those levels.

Mark, is there something you want to add?

Yes. I think when you, it is Mark Sorour, when you look at the value add in Schibsted and ourselves coming together, it’s really about being able to capture the future value of the market as soon as possible to get much of that potential.

And if I may comment on your second question, Ed, Allegro indeed has shown a healthy increase in GMV growth that we are pleased with and given their strong market position. And at this point in time, there are no plans for spinout of Allegro.

Okay. And just one final question on the organic growth numbers, which I know is always very difficult to calculate and there is a number in the back of the presentation, which is 27% organic revenue growth at e-commerce business, which I know it doesn’t relate directly to the 14% number last year, which was largely a marketplace number.

So, my question there is could you give us maybe directionally an indication whether the marketplace business has accelerated or these that are actually about the same level growth in the half? And then with the other new businesses which will come into that calculation, such as Souq or Flipkart, eMag etcetera, are those businesses in general growing faster now than they were a year ago?

So, on the first part the marketplace business has picked up year-on-year in terms of growth and has picked up a bit. Then on the second part definitely so Flipkart, Souq, eMag, our classified businesses are all growing faster year-on-year.

I quoted some numbers in my presentation. So, I said overall etail is growing 65% year-on-year and that’s an acceleration in all, but most of the underlying business they are growing faster.

The only exception Bob called out earlier, which was fashion and we are seeing that across all our key segments payments, classifieds, OCS – sorry online services.

Great. That’s very helpful.

Thank you very much.

Yes, good afternoon. Two questions from me.

One, can you please just confirm if there are no major analog switch-off in sub-Saharan Africa till March 2015, so there will be just a few, but no major spin switch-offs I expect? And then second question is on the development spend, I mean clearly in the second half you will have the impact of the combined development spending with your classified partners on your financials, but going forward as you consolidate client substantial markets, is it reasonable to expect the decline of the development spending in 2016 or I mean obviously you don’t give the forward-looking statements, but if you could share your logics on how you approach the development spending for the medium-term after the consolidation happens legally and – yes, your comments here would be helpful?

Yes. Alex, it’s Jim here.

On the analog switch-off, it’s very difficult to say, it really depends on the country by country basis. They are moving targets day in and day out and it’s just a question of time when they do go.

Some countries are meant to have an analog switch-off. We perhaps think it’s unlikely given elections in some of the countries and so on, but it’s very difficult to say.

Then on your second question, I think we were clear that nothing will happen this year. Martin was clear in his presentation that pending the regulatory approval to pull things together.

In the consolidated market, of course, we will see improvements and overall we can’t say and in a steady statement, we made some statements in the full year numbers, but our business continues to evolve and continued to look for new opportunities and we are very early in our planning cycle.

And just a quick follow-up on the second question, with the potential releases from the savings from the consolidation, do you think, is it – and potential reallocation of the deposits into the new geographies. Do you think it’s possible to spend as much given your technology is fine tune and is in great shape, both desktop and mobile product is in good shape and as you go from the bigger countries like Brazil to smaller countries like Columbia.

It’s not so easy to spend the same amount on the marketing, just thinking on those lines as you roll to smaller markets, is it reasonable to expect the decline of your development spending in the course of two, three years?

Yes. It’s Martin here.

So, as Basil, what he alluded to I think the net impact on development spend at this point is not known, because we continue to look for good investment opportunities in Classifieds. And they are still rolled out there to conquer even after this partnership.

We are very active in about 40 markets globally and this merger affects four markets, so there is still left, they have left a lot for us to build and investing too.

Okay. Thank you so much.

Hi, everyone. Thanks for taking my questions.

Just two questions, please or three, sorry. The first question is there has been quite a big increase in other receivables and loans and current liabilities on the balance sheet in this period, could you maybe give us a bit more color on that?

Also if you could just explain to us what the drivers are for increased profitability at Allegro.pl and price comparison. And the price comparison segment is it driven by revenue dynamics?

And the last question is, just on your guidance, specifically if I could ask this question to Basil, do you think ramp earnings in H2 2015, given that there was numerous once-offs in H2 2014, do you think ramp earnings will be higher in H2 2015 than H2 2014, so if we exclude Tencent, etcetera shouldn’t we expect growth in ramp earnings given what the revenue dynamics are and that there is quite a bit of once-offs that won’t be repeated? Thank you very much.

Thanks. Let me deal with the first one.

So the other receivables and payables are just timing it has to do with tax and so that’s already cleared out. So, those numbers are now back to normal.

They are really sort of offsetting things and it’s non-operational. So it’s really a non-event.

As to the ramp earnings for the second half of 2015, we don’t give guidance, we – and I am not going to comment on that.

And I can take your question on the profitability increase at Allegro, it’s driven by two things, one is GMV increase and then better cost controls.

Thank you very much.

Hi. Good afternoon.

Just coming back to PayTV CapEx and development spend, given that your DTT network is largely in place, should we expect CapEx to decline into the second half of the year, PayTV CapEx to decline in the second half of the year and then to FY ‘16. Then with the development spend, just wanted to make sure to understand the dynamics there I guess investments in local content will continue and then when you have an analog switch-off is there then an immediate impact in terms of subsidizing decoders into that market, which will then increase your development spend at that point, if you could just give some clarity there too?

Okay. I will deal with Pay-TV capital and Jim will be able to with your second question.

So, basically you are right that the bulk of the DTT network is built out, we may add a couple of more sites in the couple of cities to improve coverage, but it will be minimal. What still is to flow in the second half of the year, as I mentioned in my presentation is the completion of the build out of our facilities.

South African subscriber base has grown significantly. We need to service those customers.

So we are building out a facility, then we are building out our production facilities in East and West Africa. And those are really sort of ramping up.

So I wouldn’t look for a big decrease in the second half of the year. But longer-term I also mentioned in my presentation that once we get through that investment cycle, I think the CapEx overall in PayTV should come down.

Jim?

Yes. Craig, on local content, our intention is to continue to invest deeply in local content.

It is paying dividends for us. And then on your question around if there is a sudden analog switch-off is the heavy subsidy it really depends on what the competitor does in those particular markets.

At this stage, our intention is not being to subsidize decoders on the switch-off but there are many territories and there are many operators all competing for the same market.

Okay. So it’s quite difficult for us from a modeling point of view to try and anticipate that development spend in PayTV going forward, is that a fair comment?

It’s also hard for us because we don’t know what the competition is going to do the switch-offs have to happen. And then we will have to see what happens in the market and respond to that.

So, we are not being cage about this. We also don’t know.

Okay, alright. Thank you.

I just wanted to thanks you all for joining the call today and wish you all very nice remain of the day.