Annual results announcement
for the year ended 31 March 2022
(Prosus or the group) | Improving everyday life for billions | |||||||||||||||||
Prosus N.V. | ||||||||||||||||||
Incorporated in the Netherlands | ||||||||||||||||||
(Registration number: 34099856) | of people through technology | |||||||||||||||||
Euronext Amsterdam and JSE share code: PRX | ||||||||||||||||||
ISIN: NL 0013654783 | ||||||||||||||||||
reduced significantly. These forces drove, for the first time in many years, a decline in the group's | Food Delivery's performance remained strong as it addresses a major consumer need that is | |||||||||||||||||
Salient features | net asset value. The discount to the group's sum of the parts increased to an unacceptable level. | being fundamentally transformed by technology. We are leveraging our logistics network and | ||||||||||||||||
Taking substantive action to reduce the discount is a priority. To navigate these turbulent times we | capabilities as well as our strong customer relationships to pursue this opportunity with a real | |||||||||||||||||
Year ended 31 March | will prioritise capital towards supporting our existing businesses and prudent balance sheet | competitive advantage. The online food and convenience industry is still in its early stages of | ||||||||||||||||
management, sustaining adequate financial liquidity. | development, and we are excited by its long-term prospects, and we believe it will ultimately | |||||||||||||||||
2022 | 2021 | |||||||||||||||||
We invested US$6.2bn to increase our stakes in existing investments and in new assets where | yield a good return on investment. | |||||||||||||||||
US$'m | US$'m | |||||||||||||||||
we see substantial opportunity for future value creation. This investment was weighted largely | In Payments and Fintech, our growth momentum continued globally. We increased our | |||||||||||||||||
Revenue | 6 866 | 5 116 | ||||||||||||||||
to the first half of the year, in our Food Delivery and Edtech segments. While Delivery Hero's | ||||||||||||||||||
scale in India, one of the fastest-growing consumer internet markets, and the closing of the | ||||||||||||||||||
stock has declined in value since the last investment, we remain confident in the company's | ||||||||||||||||||
Operating loss | (859) | (1 040) | ||||||||||||||||
acquisition of BillDesk will create further opportunity to expand into credit and digital banking. | ||||||||||||||||||
future and in our continued ability to generate a return from it. In August, we also committed | Outside of India, the business continued to grow strongly. | |||||||||||||||||
Earnings per ordinary share (US cents) | 1 243 | 459 | ||||||||||||||||
US$4.7bn to acquire BillDesk, the leading bill-payment-processing company in India. The | ||||||||||||||||||
Headline earnings per ordinary share (US cents) | 204 | 360 | transaction is under review by the Competition Commission of India. | Edtech's performance remained strong and we made substantial progress in expanding the | ||||||||||||||
portfolio with acquisitions of market leaders in our areas of focus. During the year, we took | ||||||||||||||||||
Core headline earnings per ordinary share (US cents) | 247 | 299 | In the second half of the year, we invested heavily through our income statement. We | |||||||||||||||
a substantial stake in Skillsoft, which is now public, while acquiring Stack Overflow and | ||||||||||||||||||
focused on maintaining growth and customer engagement, while leveraging increased | ||||||||||||||||||
GoodHabitz. This positions us well within the key enterprise education market. Our Edtech | ||||||||||||||||||
Commentary | scale to develop opportunities in adjacent products and services. We are building | |||||||||||||||||
investments currently reach over 500 million users and cover the full span of the sector from | ||||||||||||||||||
ecosystems with multiple customer touchpoints to improve not only their experience but also | ||||||||||||||||||
In a year marked with continued global turmoil and uncertainty, | retention. We aligned technology and data with key customer needs such as convenience | kindergarten through to grade 12 (K-12) and beyond, into third- and enterprise-level education. | ||||||||||||||||
and ease of use. We will need to continue to invest organically to build on the strong | In April 2021, to improve our financial flexibility and reinforce our balance sheet, we sold | |||||||||||||||||
which has made for a turbulent operating environment, the | ||||||||||||||||||
progress we have made in autos in Classifieds, convenience in Food Delivery and India | ||||||||||||||||||
2% of Tencent's issued share capital, generating proceeds of US$14.6bn and reducing our | ||||||||||||||||||
financial year 2022 was a year of progress for Prosus. We | credit in Payments and Fintech segments. Our plans will recognise the uncertainty and | |||||||||||||||||
holding to 28.9%. Proceeds were used to fund our strategic ambitions and two share buyback | ||||||||||||||||||
volatility and the need to preserve capital. | ||||||||||||||||||
remained focused on executing our long-term strategy and | programmes that enhanced net asset value per share. Tencent has been impacted by | |||||||||||||||||
Throughout the year, the group continued to crystallise returns and return capital to | ||||||||||||||||||
delivering strong operational growth across our core segments. | regulatory action and the economic impact of Covid-19, which has resulted in slower growth | |||||||||||||||||
shareholders. In February 2022, we completed a second US$5bn share buyback | and a tough macroeconomic environment. We are firm believers that the company will | |||||||||||||||||
At the same time, we made strategic investments and laid the | ||||||||||||||||||
programme which followed the US$5bn share buyback programme in 2021. This generated | recover from this and generate significant value for shareholders and remain committed | |||||||||||||||||
foundation for future growth across the portfolio. | a meaningful enhancement to net asset value per share. Repurchased Prosus shares will | long-term investors in Tencent. | ||||||||||||||||
be cancelled in the following financial year. In total, Prosus has allocated US$50bn in | ||||||||||||||||||
The group remains focused on building on the strong momentum in our Ecommerce portfolio. | ||||||||||||||||||
Ecommerce segment revenue grew 58% (51%) to US$9.8bn and was the key contributor to | capital over the past six years with approximately 57% of that capital being invested into | |||||||||||||||||
group revenue growth of 24% (24%) to US$35.6bn (measured on an economic-interest basis). | the business and new growth opportunities; approximately 25% returned to shareholders | We will continue to invest in our platforms and to grow the opportunity set within each | ||||||||||||||||
This is strong growth on a scaled base following similar growth and momentum in the prior | in the form of share buybacks and dividends; and approximately 18% being held in cash. | segment. We aim to build on the underlying strength of each business through the creation of | ||||||||||||||||
year. Percentages in brackets represent growth in local currency, excluding mergers and | Against the backdrop of deteriorating geopolitical and economic conditions, our ecommerce | customer ecosystems, particularly in autos transactions, credit and digital banking, and food, | ||||||||||||||||
acquisitions (M&A). | convenience and grocery delivery. At the same time, we are driving profitability and cash | |||||||||||||||||
businesses were resilient, growing revenues 56% (50%) in the second half of the year, in many | ||||||||||||||||||
generation in more mature core businesses. Our goal is to build an Ecommerce portfolio that | ||||||||||||||||||
Group trading profit reduced 10% (6%) to US$5bn, reflecting investment to expand the market | cases significantly outperforming global peers. | |||||||||||||||||
will deliver sustainable value creation over the long term for all stakeholders. Furthermore, the | ||||||||||||||||||
opportunity for each segment and strengthen the customer ecosystems of our businesses. | ||||||||||||||||||
Within our Ecommerce portfolio, all segments made good progress against their financial | group will endeavour to take further steps to crystallise the value we have created over time. | |||||||||||||||||
Core headline earnings were US$3.7bn, a reduction of 23% (20%) which reflects ongoing | ||||||||||||||||||
and strategic objectives. Classifieds demonstrated healthy growth at its core, well ahead | ||||||||||||||||||
investment in the Ecommerce portfolio and a period of slower growth at Tencent as it | Given the wide geographical span of our operations and significant M&A activity in | |||||||||||||||||
of global peers. OLX Autos experienced strong triple-digit growth this year as it creates a | ||||||||||||||||||
adapted to regulatory changes in China. | Ecommerce, reported earnings were materially impacted by foreign exchange movements | |||||||||||||||||
differentiated customer experience. Our Classifieds business has been deeply impacted | ||||||||||||||||||
and the effects of acquisitions and disposals. Where relevant in this short-form results | ||||||||||||||||||
Despite a strong operational performance across the portfolio, the group, like many | by Russia's invasion of Ukraine. We are appalled by the war in Ukraine and we continue | |||||||||||||||||
announcement, we have adjusted for these effects. These adjustments (alternative | ||||||||||||||||||
technology companies, faced significant macroeconomic and geopolitical headwinds, | to do all we can for our Ukrainian employees and the people of Ukraine. Consequently, | |||||||||||||||||
leading to highly volatile capital markets in the latter part of the financial year. The | in March 2022, we announced the separation of the Russian classifieds business Avito | performance measures) are quoted in brackets after the equivalent metrics reported under | ||||||||||||||||
combination of the war in Ukraine, higher inflation and rising interest rates drove up the | from our OLX Group. Following completion of this operational separation, in May 2022, | International Financial Reporting Standards (IFRS) as adopted by the European Union | ||||||||||||||||
cost of capital and increased uncertainty. Valuations of global peer group companies | we announced our intention to exit the Russian business. We have started the search for | (IFRS-EU). These growth rates represent a comparison between the year ended 31 March 2022 | ||||||||||||||||
in tech and internet sectors declined sharply in recent months as the level of risk appetite | an appropriate buyer for our shares in Avito. | and the previous year ended 31 March 2021, unless otherwise stated. | ||||||||||||||||
Financial review | Consolidated free cash outflow was US$562m, a decrease on the prior year's free cash inflow | |||||||||||||||||
The group financial | highlights for the year ended 31 March 2022 are outlined below: | |||||||||||||||||
of US$126m. We stepped up operational working capital, and capital expenditure investment | ||||||||||||||||||
Year ended 31 March | across our businesses. Working capital requirements have increased as we invest in OLX Autos | |||||||||||||||||
and the Payments and Fintech segment. In autos, we are taking on more inventory as the | ||||||||||||||||||
2021 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | 2022 | business expands and moves towards a consumer-facing business. In Payments and Fintech, | ||||||||||
we accelerated the pace to scale our India credit initiatives, resulting in increased receivables | ||||||||||||||||||
A | B | C | D | E | F2 | G3 | H4 | |||||||||||
outstanding at year-end. The increased capital expenditure was mainly driven by distribution | ||||||||||||||||||
Group | Group | |||||||||||||||||
centre equipment and expansions at eMAG. This was offset by increased dividends from | ||||||||||||||||||
composition | composition | Foreign | Local | Local | ||||||||||||||
Tencent of US$571m (FY21: US$458m). Tencent dividends remain a meaningful and stable | ||||||||||||||||||
disposal | acquisition | currency | currency | currency | ||||||||||||||
contributor to our cash flow. After year-end in June 2022, we received our annual cash dividend | ||||||||||||||||||
IFRS 81 | adjustment | adjustment | adjustment | growth | IFRS 81 | growth | IFRS 8 | |||||||||||
of US$565m from Tencent for FY23. | ||||||||||||||||||
US$'m | US$'m | US$'m | US$'m | US$'m | US$'m | % change | % change | |||||||||||
In addition, Tencent paid a special interim dividend in the form of a distribution in specie of | ||||||||||||||||||
Revenue | ||||||||||||||||||
JD.com shares. The group received 131 873 028 JD.com shares in March 2022, representing | ||||||||||||||||||
Ecommerce | 6 230 | (133) | 822 | (224) | 3 130 | 9 825 | 51 | 58 | ||||||||||
a 4% effective interest in JD.com valued at US$3.9bn at 31 March 2022. Subsequently, the | ||||||||||||||||||
- Classifieds | 1 599 | (33) | 81 | (121) | 1 449 | 2 975 | 93 | 86 | group disposed of its full stake in JD.com for proceeds of approximately US$3.6bn. | |||||||||
- Food Delivery | 1 486 | (9) | 374 | (1) | 1 142 | 2 992 | 77 | >100 | There were no new or amended accounting pronouncements effective 1 April 2021 with a | |||||||||
- Payments and Fintech | 577 | (7) | 9 | (38) | 255 | 796 | 45 | 38 | significant impact on the group's consolidated financial statements. | |||||||||
- Edtech | 115 | 14 | 225 | - | 71 | 425 | 55 | >100 | Preparation of the short-form results announcement | |||||||||
- Etail | 2 250 | (2) | 10 | (61) | 62 | 2 259 | 3 | - | 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 27 June 2022. | |||||||||||||||||
- Other | 203 | (96) | 123 | (3) | 151 | 378 | >100 | 86 | ||||||||||
Social and Internet Platforms | 22 526 | (1 497) | 70 | 1 305 | 3 390 | 25 794 | 16 | 15 | ADR programme | |||||||||
Bank of New York Mellon maintains a Global BuyDIRECTSM plan for Prosus N.V. For additional | ||||||||||||||||||
- Tencent | 22 155 | (1 493) | - | 1 302 | 3 297 | 25 261 | 16 | 14 | ||||||||||
information, please visit Bank of New York Mellon's website at www.globalbuydirect.com | ||||||||||||||||||
- VK (previously Mail.ru) | 371 | (4) | 70 | 3 | 93 | 533 | 25 | 44 | ||||||||||
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 - Global BuyDIRECTSM, Church Street Station, | ||||||||||||||||||
Group economic interest | 28 756 | (1 630) | 892 | 1 081 | 6 520 | 35 619 | 24 | 24 | ||||||||||
PO Box 11258, New York, NY 10286-1258, USA. | ||||||||||||||||||
Trading profit | Important information | |||||||||||||||||
Ecommerce | (429) | 45 | (218) | 3 | (512) | (1 111) | <(100) | <(100) | ||||||||||
This short-form results announcement contains forward-looking statements as defined in the | ||||||||||||||||||
- Classifieds | 9 | 13 | 9 | 7 | (13) | 25 | (59) | >100 | United States Private Securities Litigation Reform Act of 1995 concerning our financial condition, | |||||||||
- Food Delivery | (355) | 33 | (129) | (2) | (271) | (724) | (84) | <(100) | results of operations and businesses. These forward-looking statements are subject to a number | |||||||||
- Payments and Fintech | (68) | 6 | (1) | (5) | 8 | (60) | 13 | 12 | of risks and uncertainties, many of which are beyond our control and all of which are based on | |||||||||
our current beliefs and expectations about future events. Forward-looking statements are typically | ||||||||||||||||||
- Edtech | (14) | 1 | (48) | (1) | (55) | (117) | <(100) | <(100) | ||||||||||
identified | by the use of forward-looking terminology such as 'believes', 'expects', 'may', 'will', | |||||||||||||||||
- Etail | 68 | - | (3) | 3 | (103) | (35) | <(100) | <(100) | 'could', 'should', 'intends', 'estimates', 'plans', 'assumes' or 'anticipates', or associated negative, | |||||||||
- Other | (69) | (8) | (46) | 1 | (78) | (200) | <(100) | <(100) | or other variations or comparable terminology, or by discussions of strategy that involve risks and | |||||||||
uncertainties. These forward-looking statements and other statements contained in this short-form | ||||||||||||||||||
Social and Internet Platforms | 6 154 | (413) | (5) | 342 | 241 | 6 319 | 4 | 3 | ||||||||||
results announcement on matters that are not historical facts involve predictions. No assurance can | ||||||||||||||||||
- Tencent | 6 126 | (413) | - | 342 | 218 | 6 273 | 4 | 2 | be given that such future results will be achieved. Actual events or results may differ materially as | |||||||||
- VK (previously Mail.ru) | 28 | - | (5) | - | 23 | 46 | 82 | 64 | a result of risks and uncertainties implied in such forward-looking statements. A number of factors | |||||||||
could affect our future operations and could cause those results to differ materially from those | ||||||||||||||||||
Corporate segment | (110) | - | - | 1 | (58) | (167) | (53) | (52) | ||||||||||
expressed in the forward-looking statements, including (without limitation): (a) changes to IFRS | ||||||||||||||||||
Group economic interest | 5 615 | (368) | (223) | 346 | (329) | 5 041 | (6) | (10) | and associated interpretations, applications and practices as they apply to past, present and | |||||||||
future periods; (b) ongoing and future acquisitions, changes to domestic and international business | ||||||||||||||||||
1 Figures presented on an economic-interest basis as per the segmental review. | ||||||||||||||||||
and market conditions such as exchange rate and interest rate movements; (c) changes in | ||||||||||||||||||
2 A + B + C + D + E. | 3 [E/(A + B)] x 100. | 4 [(F/A) - 1] x 100. | ||||||||||||||||
domestic and international regulatory and legislative environments; (d) changes to domestic and | ||||||||||||||||||
international operational, social, economic and political conditions; (e) labour disruptions and | ||||||||||||||||||
The group delivered strong progress for the year ended 31 March 2022. Group revenue, | the group's directors resigned with immediate effect from the VK board and discontinued | industrial action; and (f) the effects of both current and future litigation. The forward-looking | ||||||||||||||||
measured on an economic-interest basis, grew 24% (24%) to US$35.6bn. This was driven by | equity-accounting the investment going forward on account of a loss of significant influence. | statements contained in this short-form results announcement apply only as of the date of this | ||||||||||||||||
short-form results announcement. We are not under any obligation to (and expressly disclaim | ||||||||||||||||||
Ecommerce revenues, which rose 58% (51%). Our economic-interest share in Tencent's revenue | The group reclassified the foreign currency translation reserve amounting to a loss of | |||||||||||||||||
any such obligation to) revise or update any forward-looking statements to reflect events or | ||||||||||||||||||
grew 14% (16%) off | a sizable prior-year base. Group trading profit reduced 10% (6%) to US$5bn. | US$1.14bn from 'Other comprehensive income' to the income statement as a result of the | ||||||||||||||||
circumstances after the date of this short-form results announcement or to reflect the occurrence | ||||||||||||||||||
Tencent's contribution to the group's trading profit improved by 2% (4%). | loss of significant influence over the investment. | |||||||||||||||||
of unanticipated events. We cannot give any assurance that forward-looking statements will prove | ||||||||||||||||||
Core headline earnings were US$3.7bn - down 23% (20%), impacted by our sale of 2% interest | Headline earnings decreased by US$2.8bn to US$3.1bn. This is mainly due to the decrease | |||||||||||||||||
correct and investors are cautioned not to place undue reliance on any forward-looking statements. | ||||||||||||||||||
in Tencent and Tencent's reduced contribution to core as a result of increased losses from its | in contribution to headline earnings from associates of US$2.8bn, the increase in trading losses | Further information | ||||||||||||||||
associates. | in Ecommerce and the increase in net finance cost (US$141m). This was partially offset by the | |||||||||||||||||
This short-form results announcement is the responsibility of the directors and is only a | ||||||||||||||||||
decrease in the share-based compensation expenses of the group (US$599m). | ||||||||||||||||||
On a consolidated basis, total revenue increased by US$1.8bn, or 34% (39%), from US$5.1bn in | summary of the information in the annual report. The annual report was released on SENS | |||||||||||||||||
the prior year to US$6.9bn, with strong contributions from all the segments. As we continue to | Investments have been funded from upstreamed dividends, asset sales and more efficient use | on 27 June 2022 and can be found on the company's website, www.prosus.com, and can also | ||||||||||||||||
invest in organically building out customer ecosystems across our segments, trading losses | of the group's balance sheet. During the year, we raised additional capital of US$9.25bn in | be viewed on the JSE link, https://senspdf.jse.co.za/documents/2022/jse/isse/PRXE/YE22.pdf. | ||||||||||||||||
expanded from US$163m to US$547m, mostly driven by investment in Food Delivery, our Etail | bonds at attractive interest rates, further enhancing our financial position, improving liquidity, | Copies of the annual report may also be requested from the company's registered office, | ||||||||||||||||
segment and acquisitions in Edtech. | and extending debt maturities. Some of the proceeds were used to settle US$1.6bn 2025 and | at no charge, during office hours. The annual report for year ended 31 March 2022 has been | ||||||||||||||||
Equity-accounted results from our associate investments increased to US$9.3bn, or 31%, from | 2027 notes. The group has no debt maturities due until 2025, and 87% of our debt is due after | audited by PricewaterhouseCoopers N.V., our independent auditor. Their unqualified report | ||||||||||||||||
five years and just under 60% due in the next 10 years. | which includes key audit matters is appended to the annual report and is available on | |||||||||||||||||
US$7.1bn in the prior year, with positive contributions from Tencent and Delivery Hero. Share | www.prosus.com. Any investment decision should be based on the annual report published | |||||||||||||||||
of equity-accounted results includes investment disposal gains of US$6.2bn, net fair-value gains | We ended the year with a strong and liquid balance sheet comprising US$13.6bn in cash | on SENS and the company's website. The information in this short-form results announcement | ||||||||||||||||
on financial instruments of US$1.8bn, and impairment losses of US$1.1bn recognised in | and cash equivalents (including short-term cash investments) and interest-bearing debt of | has been extracted from the reviewed information published on SENS, but the short-form | ||||||||||||||||
Tencent and Delivery Hero reported results. | US$15.7bn (excluding capitalised lease liabilities). We also hold an undrawn US$2.5bn | results announcement itself was not reviewed. | ||||||||||||||||
The group recognised a gain of US$12.3bn on the income statement due to the trimming of | revolving credit facility. This sound financial | position will enable us to deliver on our strategy | On behalf of the board | |||||||||||||||
to scale our businesses and, over time, deliver significant and sustainable profitability and | ||||||||||||||||||
our holding in Tencent. Furthermore, the group recognised impairment losses on goodwill and | ||||||||||||||||||
cash flow generation. | Koos Bekker | Bob van Dijk | ||||||||||||||||
equity-accounted investments. Impairment losses of US$246m recognised on goodwill related to | ||||||||||||||||||
Chair | Chief executive | |||||||||||||||||
Stack Overflow, primarily as a result of the current market conditions and the increase in risk-free | Overall, we recorded a net interest expense of US$345m for the year, elevated from the prior | |||||||||||||||||
rates which resulted in an increase in the discount rate. Equity-accounted investments were | year, given new bond issuances and an additional US$217m related to early settlement of | Amsterdam | ||||||||||||||||
impaired by US$584.1m, of which US$474m related to the impairment of VK. In March 2022, | the 2025 and 2027 bonds. | 25 June 2022 |
1082 PP Amsterdam, the Netherlands Sponsor: Investec Bank Limited | www.prosus.com | |
Directors: JP Bekker (chair), B van Dijk (chief executive), 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, Y Xu Company secretary: L Bagwandeen | ||
Registered office: Symphony Offices, Gustav Mahlerplein 5, 1082 MS Amsterdam, the Netherlands Euronext listing agent: ING Bank N.V. | Euronext paying agent: ABN AMRO Bank N.V., Corporate Broking and Issuer Services, HQ 7212, Gustav Mahlerlaan 10, |
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Prosus NV published this content on 27 June 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 June 2022 05:25:07 UTC.