NASPERS LIMITED – Annual results announcement for the year ended 31 March 2021 – SENS

Annual results announcement for the year ended 31 March 2021

Naspers Limited
(Registration number: 1925/001431/06)
(Naspers or the group)
JSE share code: NPN ISIN: ZAE000015889
LSE code: NPSN ISIN: US6315122092

Annual results announcement for the year ended 31 March 2021

Commentary

Our Board is immensely proud of what our people achieved during the past year. They managed the pandemic, delivered powerful
revenue growth and lifted profitability. Foundations were laid for future growth.

The year ended 31 March 2021 (FY21) was an extraordinary period. Despite the challenges, the group has delivered strong results
across its portfolio and made good progress against its strategy. Group revenue, measured on an economic-interest basis, grew
34% (32%) to US$29.6bn, a meaningful acceleration of 17pp (9pp) on the same period last year. Group trading profit grew 49% (45%)
to US$5.6bn.

Seven years ago, we set out a strategy to build valuable, global consumer internet businesses. We focus on high-growth markets,
where our platforms can provide useful products and services for millions of people in their everyday lives. In recent years,
we have deliberately repositioned the group for an increasingly online world and invested effectively to accelerate growth and
deliver good returns across our portfolio.

Over the past 12 months, this strategy and the momentum we have built has paid off. The group has benefited from its online focus,
its global reach, diversified operations and strong financial footing. Our teams have also adapted well to the changing operating
environment.

This has meant we have been well placed to effectively respond to the world’s increased demand for online products and services
triggered by Covid-19. Our businesses across online classifieds, food delivery, payments and finance technology, education technology
and online retail have continued to serve and support their customers and communities.We have also identified promising adjacencies
for our existing businesses as well as new business models through our global Ventures team.

In FY21 our businesses grew stronger, building on the momentum they had at the end of the previous year. For some businesses, there
was an initial adverse impact in the face of early lockdowns and restrictions. We adapted quickly, and as restrictions eased and the
pandemic drove more people online, we were ready to meet heightened consumer demand with products and services that helped people and
their communities through difficult times. At a local level, we also provided additional support to our people, partners, customers,
communities and in some cases, governments, to help our stakeholders respond to Covid-19. Separately, we enhanced our commitment to
environmental and social issues, and we are carbon-neutral as a group, having offset our emissions for the past financial year.

During the period, we accelerated revenue growth, improved profitability and cash generation, and grew customer numbers. All core
Ecommerce segments made progress against their financial and strategic objectives. Classifieds performed well under tough circumstances
and recovered in the second half, regaining financial and operational momentum by focusing on continued innovation with products that
support users along their transaction journey. Food Delivery and Etail performed exceptionally well as customers shifted from offline
to online. After an initial drop in volumes in India as the country entered lockdown, our Payments and Fintech business rebounded,
reflected in accelerating volumes. Finally, our investments in Edtech began to bear fruit, driven by increased adoption by students
working from home.

Tencent recorded another strong financial performance. We believe it remains very well positioned for growth. We remain committed
long-term investors in Tencent.

We are focused on building further value across our businesses and see significant upside in some new opportunities in which we have
invested. Notably, in adding the autos transaction businesses to our Classifieds operations, a broader on-demand delivery ecosystem
in our Food Delivery segment, expanding into digital banking in Payments and Fintech, and in the promising new segment of Edtech,
which will be reported on from 1 April 2021.

Over the years, we have increased our financial flexibility, allowing the group to pursue its growth objectives. This has enabled
us to invest in expansion and in ourselves. To illustrate this, we announced a US$5bn share purchase programme of Naspers and Prosus
stock. This was implemented through on-market acquisitions of US$1.4bn Prosus N ordinary shares, completed in February 2021.
In addition, US$3.6bn Naspers N ordinary shares, which will be completed by the end of June 2021.

On 12 May 2021, Prosus announced a voluntary share exchange offer to acquire 45.4% of Naspers shares. We believe this is a useful
step in unlocking value for both Naspers and Prosus shareholders by reducing Naspers’s outsized weighting on the
Johannesburg stock exchange (JSE). It will help Prosus in more than doubling its free float on the stock market to 59.7%.
Naspers shareholders will derive immediate value accretion from exchanging their shares into the lesser-discounted Prosus shares.
This value should compound at a lower discount over time as Prosus’s value grows. Naspers shareholders should also benefit from
net asset value (NAV) accretion at the Prosus level. Importantly, while we are resizing Naspers on the JSE for the long term,
it remains the largest company in South Africa by market capitalisation. For Prosus shareholders, buying Naspers shares at a
higher discount will be NAV accretive, as Prosus will buy high-discount shares with lower-discount shares. The transaction should
unlock billions of dollars of value and assist future value creation. Further, it addresses a driver of Naspers’s discount by
almost halving its index weighting, while remaining South Africa’s most valuable company on the JSE. In addition, it improves
Prosus’s investment profile, increasing its free float’s economic exposure to NAV by over 100%. It is backed by a US$5bn buyback
to support the transaction and stimulate orderly trading. The transaction is expected to close in the third quarter of 2021.
For further details, please go to https://www.share-exchange-offer.com/.

Given the wide geographical span of our operations as well as significant M&A (mergers and acquisitions) in Ecommerce reported
earnings are materially impacted by foreign exchange movements and the effects of acquisitions and disposals. Where relevant in this
report, we have adjusted for these effects. These adjustments (pro forma financial information) are quoted in brackets after the
equivalent metrics reported under International Financial Reporting Standards (IFRS) and is provided in the summarised consolidated
financial statements.

The following segmental reviews are prepared on an economic-interest basis (which includes consolidated subsidiaries and a proportionate
consolidation of associates and joint ventures), unless otherwise stated.

Salient features

Year ended 31 March
2021 2020
US$’m US$’m
Revenue 5 934 4 001
Operating loss (1 189) (720)
Earnings per ordinary share (US cents) 1 243 709
Headline earnings per ordinary share (US cents) 970 496
Core headline earnings per ordinary share (US cents) 814 656

FINANCIAL REVIEW

The group financial highlights for the year ended 31 March 2021 are outlined below:

Year ended 31 March

2020 2021 2021 2021 2021 2021 2021 2021
A B C D E F2 G3 H4
Group Group
composition composition Foreign Local Local
disposal acquisition currency currency currency
IFRS1 adjustment adjustment adjustment growth IFRS1 growth IFRS
US$’m US$’m US$’m US$’m US$’m US$’m % change % change
Revenue
Ecommerce 4 680 (353) 481 (325) 2 366 6 849 55 46
– Classifieds 1 299 (115) 310 (93) 208 1 609 18 24
– Payments and Fintech 428 (11) 37 (28) 151 577 36 35
– Food Delivery 751 (17) 6 (189) 935 1 486 greater than 100 98
– Etail 1 756 (11) 95 25 991 2 856 57 63
– Travel 146 (146) – – – – – (100)
– Other 300 (53) 33 (40) 81 321 33 7
Social and Internet Platforms 17 189 (115) – 736 4 716 22 526 28 31
– Tencent 16 779 (54) – 786 4 644 22 155 28 32
– Mail.ru 410 (61) – (50) 72 371 21 (10)
Media 272 – 4 (14) (51) 211 (19) (22)
Corporate segment – – – – – – – –
Intersegmental (5) – – 1 4 – 80 100
Group economic interest 22 136 (468) 485 398 7 035 29 586 32 34
Trading profit
Ecommerce (823) 100 (50) (19) 353 (439) 49 47
– Classifieds 44 45 (38) (28) (8) 15 (9) (66)
– Payments and Fintech (67) 5 (7) (3) 4 (68) 6 (1)
– Food Delivery (624) 17 (3) (2) 257 (355) 42 43
– Etail (63) 8 (2) 3 115 61 greater than 100 greater than 100
– Travel (22) 22 – – – – – 100
– Other (91) 3 – 11 (15) (92) (17) (1)
Social and Internet Platforms 4 699 (72) – 190 1 337 6 154 29 31
– Tencent 4 601 (15) – 194 1 346 6 126 29 33
– Mail.ru 98 (57) – (4) (9) 28 (22) (71)
Media 8 – – 3 (19) (8) less than (100) less than (100)
Corporate segment (159) – (1) 4 4 (152) 3 4
Group economic interest 3 725 28 (51) 178 1 675 5 555 45 49
1 Figures presented on an economic-interest basis as per the segmental review.

2 A + B + C + D + E. 3 [E/(A + B)] X 100. 4 [(F/A)-1] X 100.

Financial review

The group delivered strong results for the year ended 31 March 2021. Group revenue, measured on an economic-interest basis of US$29.6bn,
was driven by Ecommerce revenues which grew 46% (55%) year on year, and Tencent which grew 32% (28%) year on year. Group trading profit
grew 49% (45%) to US$5.6bn. Aggregated trading losses in our Ecommerce segments reduced by 47% (49%) or US$384m to US$439m. Trading profit
of our profitable ecommerce businesses grew by 44% (49%) to US$450m. Tencent’s contribution to the group’s trading profit improved 33% (29%).

Core headline earnings were US$3.5bn – up 21% (15%), driven by improved profitability from our Ecommerce units and the growing
contribution from Tencent.

On a consolidated basis, total revenue increased by US$1.9bn, or 48%, from US$4.0bn in the year ended 31 March 2020 to US$5.9bn in the year
ended 31 March 2021, primarily due to Food Delivery and Etail. Operating loss increased from US$720m to US$1.2bn despite the significant,
improved performance in revenue and profitability across most of our segments. This was primarily due to an increase in the cash-settled
share-based payment expense as a result of marked improvement in ecommerce and tech valuations. The strong performance of our businesses
over the past year drove an increase in valuations of these businesses and therefore an increase in the cash-settled payment liability.

Our equity-accounted results in equity-accounted companies increased by US$3.2bn, or 81%, from US$3.9bn in the year ended 31 March 2020
to US$7.1bn in the year ended 31 March 2021. The increase is driven primarily by Tencent and Swiggy, which reported improved profitability
during the year. The equity-accounted results include investment disposal gains of US$1.1bn, impairment losses of US$968m and net fair value
gains on financial instruments of US$2.5bn.

In August and December 2020, Prosus raised US$4.4bn in debt, comprising its longest-dated US dollar offering to date and its debut euro notes
offering. Strong investor demand resulted in attractive pricing that reduced our average funding cost. The group has no debt maturities due
until 2025.

We ended the period with a strong and liquid balance sheet. We had net debt of US$2.7bn, comprising US$5.2bn in cash and cash equivalents
(including short-term cash investments), net of US$7.9bn in interest-bearing debt (excluding capitalised lease liabilities). In addition,
in April 2021, we received US$14.6bn from the sale of a 2% interest in Tencent Holdings Limited. Proceeds from this further strengthened
our financial flexibility for further investment. We also hold an undrawn US$2.5bn revolving credit facility. Overall, we recorded a net
interest expense of US$167m for the period.

Consolidated free cash outflow was US$4m, an improvement on the prior year’s free cash outflow of US$383m. This was driven by growth in our
Ecommerce profitability, dividends received from Tencent of US$458m (2020: US$377m) and improved working capital management.

We continue to explore growth opportunities to expand our ecosystem and position the business for sustainable growth. Across the group,
we invested US$3.6bn, notably:

In our Classifieds unit, we merged letgo and OfferUp into a business with national reach across the United States (US), well positioned in
a highly competitive market. As part of the transaction, we contributed US$100m to support its continued growth and monetisation. We injected
our Middle Eastern Classifieds assets into Emerging Markets Property Group (EMPG) and contributed US$75m in a financing round that valued
the business at over US$1bn. Our joint venture OLX Brazil completed the US$520m (BRL2.9bn) acquisition of leading real estate vertical
Grupo ZAP, strengthening its positioning in the real estate market.

In Food Delivery, we acquired an additional 8% interest in Delivery Hero on 31 March 2021 for US$2.6bn to offset current and future dilution.
We remain the largest shareholder.

In Payments and Fintech, we invested an additional US$67m in Remitly to expand its suite of products.

Finally, we focused on increasing our exposure to edtech by investing US$60m in Eruditus, a global professional higher-education online
platform. In November, we announced a total investment commitment of US$500m in Skillsoft via Churchill Capital Corp II’s special-purpose
acquisition company, which closed in June 2021. The transaction creates a leading digital-learning company with a comprehensive suite of
on-demand and live virtual content.

There were no new or amended accounting pronouncements effective 1 April 2020 with a significant impact on the group’s consolidated
financial statements.

Effective 1 April 2020, the group made a voluntary change to its accounting policy on the subsequent measurement of written put option arrangements
with non-controlling shareholders. Subsequent changes in the carrying value of put option liabilities previously recognised in the summarised
income statement in ‘Other finance income/(costs) – net’ are now recognised through equity. We adopted this change in accounting policy
retrospectively, but the impact is insignificant to the consolidated statement of financial position as all previous remeasurements recognised
through the income statement are already accumulated in equity as at the effective date of the change.

Dividend

A dividend will be paid in relation to the Naspers N ordinary shares and A ordinary shares of the amount that Naspers receives from Prosus
as a dividend as referred to in the Prosus results announcement dated 21 June 2021, either (i) as a terminal economics distribution under
the cross-holding agreement between Naspers and Prosus if the exchange offer transaction announced by Prosus on 12 May 2021 is implemented
and settlement thereof occurs, or (ii) if this is not the case, as a dividend payment in the ordinary course. The board intends to declare
the dividend as soon as practicable after the exchange offer transaction has been implemented, or when it is known that the exchange offer
transaction will no longer proceed.

Preparation of the short-form results announcement

The preparation of the short-form results announcement was supervised by the group’s financial director, Basil Sgourdos CA(SA).
These results were made public on 21 June 2021.

ADR programme

Bank of New York Mellon maintains a GlobalBuyDIRECTSM 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 – GlobalBuyDIRECTSM, 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. By their nature, forward-looking statements
involve risk and uncertainty because they relate to future events and circumstances and should be considered in light of various important
factors. 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. The key factors that could cause
our actual results performance, or achievements to differ materially from those in the forward-looking statements include, among others,
changes to IFRS and the interpretations, applications and practices subject thereto as they apply to past, present and future periods; ongoing
and future acquisitions; changes to domestic and international business and market conditions such as exchange rate and interest rate movements;
changes in the domestic and international regulatory and legislative environments; changes to domestic and international operational, social,
economic and political conditions; the occurrence of labour disruptions; and industrial action and the effects of both current and future litigation.
We are not under any obligation to (and expressly disclaim any such obligation to) revise or update any forward-looking statements contained in
this report, whether as a result of new information, future events or otherwise. We cannot give any assurance that forward-looking statements
will prove to be correct and investors are cautioned not to place undue reliance on any forward-looking statements contained herein.

Further information

This short-form results announcement is the responsibility of the directors and is only a summary of the information in the summarised consolidated
financial statements. This short-form results announcement was released on 21 June 2021 and the summarised consolidated financial statements can be
found on the company’s website, www.naspers.com and can be viewed on the JSE link, https://senspdf.jse.co.za/documents/2021/JSE/ISSE/NPN/YE21.pdf.
Copies of the full summarised consolidated financial statements may also be requested from the company’s registered office,
at no charge, during office hours. The summarised consolidated financial statements for year ended 31 March 2021 have been audited by
PricewaterhouseCoopers Inc., our independent auditor. Their unqualified report is appended to these summarised consolidated financial statements
available on www.naspers.com. Any investment decision should be based on the summarised consolidated financial statements published on SENS and the
company’s website. The information in this short-form results announcement has been extracted from the reviewed information published on SENS,
but the short-form results announcement itself was not reviewed.

On behalf of the board

Koos Bekker Bob van Dijk
Chair Chief executive

Cape Town

21 June 2021

Directors: JP Bekker (chair), B van Dijk (chief executive), EM Choi, HJ du Toit, CL Enenstein, M Girotra, RCC Jafta, AGZ Kemna, FLN Letele, D Meyer,
R Oliveira de Lima, SJZ Pacak, V Sgourdos, MR Sorour, JDT Stofberg, BJ van der Ross, Y Xu

Company secretary: L Bagwandeen

Registered office: 40 Heerengracht, Cape Town 8001 (PO Box 2271, Cape Town 8000, South Africa)

Transfer secretaries: JSE Investor Services Proprietary Limited, 13th Floor Rennie House, 19 Ameshoff Street, Braamfontein 2001
(PO Box 4844, Johannesburg 2000, South Africa)

Sponsor: Investec Bank Limited, 100 Grayston Drive, Sandown, Sandton 2196, South Africa

www.naspers.com
Date: 21-06-2021 07:50:00
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