Multichoice Group Limited

Hello everybody and welcome to the MultiChoice FY24 results call. This is Molloy Horne and on behalf of the group, I'd like to welcome you and also introduce the representatives of MultiChoice with me on the call today. There's our CEO, Calvin Moela, and our CFO, Tim Jacobs. He walked this journey with us for many, many years as moderator of our results calls. Chris sadly passed away recently, And may his soul rest in peace. We swear to his colleagues and his family for your big loss. So to start today's proceedings, we'd like to play you a video to remind you what we're all about. And thereafter, Calvo will start his presentation. Thank you very much.

I see trees of green. Red roses too And I think to myself Oh, what a wonderful world Babies cry I watch them grow They'll learn much more Than I'll ever know I've had to rest What a wonderful world Yes, I repeat to myself Oh, wonderful world.

Good afternoon, everyone, and welcome to our results presentation. To start, let's turn to slide five. I want to begin by thanking all our teams at MultiChoice for their continued commitment to our vision of enriching the lives of millions of people through entertainment and technology. We have long held this view and in recent years have carefully invested in our strategy of enabling our customers to stay within our platform while enjoying the services and product they need beyond just video entertainment. We continue to innovate, partner and invest to grow from our core linear video business by developing and scaling adjacent streaming and interactive entertainment services. Simply put, for our customers, it means Africa's most live-store retailer is fast becoming the entertainment platform of choice. We like to imagine this as concentric circles around our customers, a platform catering for their entertainment needs, from financial services that that allow them to afford and pay for their entertainment, to the technologies required for access, and of course, a choice of video and interactive entertainment options, which our customers can enjoy in their homes or increasingly in their hands. The increased penetration of smartphones is changing how we consume and engage with content. We see this as an opportunity to increase our presence beyond the current 21 million households and into countless more fans across Africa. This is what the strategy looks like for us as a business, but for multi-choice customers, our strategy means we are catering for their entertainment needs, whether they are in their homes or on the move. With GSCV as your home of entertainment and the ultimate aggregator, we bring you a lean back experience with the option to stream, one place to browse, buy and consume all your content across all your devices. Through ShowMax, we are bringing you a stream-focused service with great local originals and the best of international content, as well as mobile-only Premier League sports. All are available to you anytime, anywhere. With this reminder of our strategy, let's turn to slide seven to focus on our progress. Our results for financial year 2024 demonstrate resilient group performance in challenging macro conditions. They also highlight our ambitions as reflected in the success of the new growth initiatives, where clear strategic milestones were achieved. Despite a forex impact of over 4 billion rand, which is more than the last four years combined, we have delivered a trading profit margin of 26% in our South African business and maintained positive trading profit for our business in the rest of Africa for a second consecutive year. Our teams deserve special thanks for delivering close to 2 billion rand in cost savings, in addition to reducing decoder subsidies by more than 1.5 billion rand, allowing us to navigate the current macro environment and safeguard cash generation. These solid results in our more mature operations provide the foundation we need to confidently drive growth opportunities in places like Showmax, Moment, and Supersportbet, which have now all progressed from being strategic ambitions to revenue-generating businesses with great growth prospects. The Showmax story is particularly exciting, and slide 8 shows us why. This past year was a pivotal year for Showmax. Having officially concluded the partnership with Comcast in April 2023, the long-awaited relaunch took place in February this year. The launch included several notable achievements. We successfully launched across 44 markets on the continent, initially focusing our marketing efforts on South Africa and Nigeria, with markets like Kenya and Ethiopia to follow. We transitioned the entire tech stack to Peacock's world-class platform and customized it for localized requirements like the support for low-bandwidth devices and data-saving functionality. We partnered with telco operators to provide our customers with maximum entertainment for minimum data cost. We migrated almost 100% of the eligible customer base to the new ShowMix platform, and 88% of those migrated had reactivated their accounts in the seven weeks to the year end. And we enjoyed record-breaking subscriber growth in the month of March. Key to the early ShowMix success has not only been its well-class platform and user interface, but also its valuable partners, incredible content, and great pricing. During the year, ShowMix ramped up its local content stream in 59 originals, popular shows that drove viewership include The Trekking Tower Buster, The Mermaid Lap, Adulting, and Real Housewives. This is the beginning for the new ShowMix and the positive impact it will have on our business. We look forward to sharing more successes as our streaming journey continues. Showmax and all our entertainment services benefit from our group's ongoing and increasing investment in African content, which our customers greatly value. We are the largest producer of original content on the African continent, increasing our investment at a time when most international streamers seem to be slowing down their investment outside of their core markets. At the same time, we continue to license some of the best international content globally through our long-term content partners. But let's turn to page 9 for more on content. We produced in excess of 6,500 hours of local content again this year, accounting for over half of our general entertainment spend, and our local content library now has up to over 84,000 hours of content, 12% more than last year. Six years in the making, Shaka Ilembe was the highlight of the year and became Africa's biggest TV series ever. Shot entirely on location in South Africa, this epic production was created through the skills of over 8,000 people and watched by millions. Across Africa, we launched three new proprietary channels in Ethiopia, Uganda, and Mozambique. while also producing content in Africa's fourth most spoken language, Oromoa. In addition, we unveiled a supercharged African magic of local content. Investment in local content directly or through co-productions will continue as one of our key differentiators. the other being sport, which we'll cover on slide 10. Supersport's headline broadcast during the year included the Men's Rugby World Cup in France, the Men's Cricket World Cup in India, AFCON, the FUFA. Women's World Cup in New Zealand and Australia, as well as the Women's Netball World Cup in Cape Town. We also hosted the second SA20 cricket season, with peak audiences increasing a further 35% from the great success last year. The FY24 renewal cycle was a successful one. Given our track record in successful delivery, we were able to renew access to popular sports events to continue to add value to our subscribers and differentiate our services. Popular renewals included the Champions League, SA Rugby, IPL Cricket, the Tour de France, the PGA Tour and UFC to name a few. All of this ensure we continue delighting our customers with arguably more live sport than any broadcaster in the world. We offer over 34,000 live events to choose from, including an 8% increase in local sport content. And it's no wonder that over 30 million customers follow us on social media for their sporting news and highlights. Through Supersport and our partners, we are truly a world of champions. Turning to slide 11, I want to end my strategic overview on two key initiatives that I'm particularly proud of. The first ever all-woman crew to cover a global sporting event. the Women's Netball World Cup. As part of our Here for Hair campaign, it reflects our focus on growing the coverage, support, and popularity of women's sport across Africa. Our super sports schools business is also going from strength to strength. This year saw us doubling the registered base, displaying more than 49,000 hours of live programming, across 43 different sporting codes, covering 900 sports festivals, more than 1,100 schools, and over 14,500 teams. As you can see, content is truly at the heart of what we do. Bringing our customers the best in local and global general entertainment and sport available in their homes and in their hands across the continent sets MultiChoice apart from its competitors. True to our vision, we continue enriching lives through entertainment and technology. So let's turn to slide 13 for a closer look at the performance of our various businesses. This year has been like no other in terms of economic turmoil, and we are not alone in feeling the challenges of a down cycle and weaker consumer environment. Load shedding in South Africa remained a key challenge in the past year. Not only did we experience more load shedding days, but also higher levels, as the chart on the right shows. The negative impact on our business and its revenues cannot be underestimated, something we clearly saw through the pickup in subscribers activity in April and May this year, as we enjoyed an extended period of no disruptions. Against the backdrop of high inflation and interest rates, the rising cost of living, and disrupted power supply, we had to navigate carefully, balancing decisions to safeguard cash and profitability with the need to future-proof our business by investing in new opportunities. Our strategy reflects the need to cater for the challenging consumer habits in the world of video entertainment. Younger customers moving to streaming or seeking additional interactive entertainment while they watch their favorite sport are just two examples. To us, it seems that the tougher economic climate may have accelerated some of these changing preferences. making it even more important that we move ahead of the times. At the moment it is quite hard to tell exactly which trends are cyclical and which ones are structural, but one thing we know for sure is that nobody else has the variety of content we have for the customers we serve. This, coupled with our research capability and years of experience, puts us in a great position to understand the entertainment choices, to identify their needs, and ultimately to tap into additional growth opportunities. The graph on slide 14 reflects our strategic ambitions around these opportunities to build a portfolio of digital products layered on top of the traditional linear base. to drive ongoing top line growth at a time when the linear business in South Africa is starting to mature. Our strategy to grow these additional revenues is no longer only a vision, it is gaining real traction. We are in the fortunate position that we don't have to choose between linear and streaming. In some markets, where broadband and data is more readily available, streaming will continue to grow. And in others, our At MultiChoice, we continue to deliver entertainment options and supporting services aimed at being Africa's entertainment platform of choice. Turning to slide 15, although linear page TV is maturing globally and also in South Africa, it remains the mainstay of our operations. It is therefore critically important that we safeguard this business, which provides a solid cash-generating business from which to launch new services. We are pleased that the initiatives implemented by the South African leadership team to drive retention of the premium bouquet are paying off. Although the subscriber trend is still downward, below that, the graph at the bottom left shows the positive impact of the team's decision to recalibrate the pricing and value proposition of the DSTV Business Play packages. This led to a 32% increase when comparing the monthly revenues in August before the change with those to the revenue growth in DSTV Commission. The middle graph at the top reflects DSTV Stream's great traction since its relaunch with active customers. 90% of the DSTV Stream subscribers Added in the period are new subscribers who have not subscribed to our services before. ExtraStream, which solves the one-stream limitation via mobile, was launched with great success early this year. This gives us confidence to launch our new proximity control option later on, which is set to offer additional streams within a household. Nemesis, our insurance business, continues to enjoy strong growth, with active policies increasing a healthy 19% to 3.3 million. This segment reported an impressive 35% increase in revenue, just shy of the R1 billion mark. We are also pleased with the ongoing traction of DHCV Internet, which almost doubled its customer base and reported a very pleasing 160% growth in revenue year on year. Slide 16 shows the key KPIs of a South African linear business. We have already discussed the impact of weak macro and low shading on our business, resulting in increased pressure on subscriber number activity and viewership. Due to a strong focus on retention, the decline in active subscribers in South Africa was limited to 5%, and the active base as a group, we have largely focused on the 90-day subscriber metric since listing in order to provide a subscriber number that looks through the monthly volatility in the base. However, management is increasingly managing the business on the basis of active subscribers to optimize retention and activity rates from month to month in a low-growth environment. As a result, our commentary is now focused on active subscribers, but we still provide the 90-day active subscriber numbers in our appendix for continuity. Although the premium bouquet is trending towards a stable base, given the targeted retention efforts, The premium customer tier, which includes the premium and compact plus bouquet, was again dragged down by the pressure on the compact plus base, which is much more susceptible to macroeconomic pressures. The mid-market compact base, which is most exposed to the macroeconomic challenges, was down 9%, while the mass market tier was 2% lower due to pressure in the family base, the impact of low trading, and reduced decoder subsidies. Despite a deadline in active days, ARPU held stable at 281 rands, benefiting from up to 5.6% following inflation. The past year presented the toughest set of macroeconomic conditions for the rest of Africa business since 2016. In February, the official and parallel Naira rates reached peaks of 1,600 and 1,900 Naira to the U.S. dollar respectively, with several other African markets, also in the rest of Africa, stepped up to the challenge of maintaining profitability by implementing revenue-supporting measures and taxical savings. to drive the streaming base and delivering strong festive campaigns. The launch of GoTV Super Plus in August provided DTC subscribers with the same value and price as the GSTV Compact offering. This package gained great traction, providing ARPU support of around $5 to $6 more per subscription and a prospect of a multi-million dollar. For a high inflation environment, we increased prices across the region by 27% on a weighted average basis. Although our general policy is to increase prices only once a year, the acute currency challenges have forced us to push through two price increases in four African markets. The team also implemented specific initiatives to reduce costs, especially around cities last year, around the FIFA World Cup, and taking the current... It's a FIFA World Cup year, especially one like last year. When we added 1.4 million customers, some downward pressure on subscriber growth is to be expected. But the drop of 13% this year was more severe, resulting in a closing base of 8.1 million active customers at the end of March. While the mid-market was up 18%, the mass market base dropped 20%, hit by a macro turmoil and cost of living crisis across Africa, but predominantly in Nigeria. Active days were down 17 days, not only because customers are taking strain, but also as a result of power outages in Nigeria, Zambia, and Zimbabwe, impacting on their ability to watch television. Blended ARPU came in just above $9. We responded well to the challenges and kept this segment profitable. In the short term, these challenges are likely to remain, but over the long term, we retain our belief that Africa represents a significant growth opportunity for us. Slide 19 reflects on the performance of Kingmakers, our 49% owned sport betting business. Despite the impact of a challenging macro environment in Nigeria, Kingmakers continues to deliver positive underlying operating momentum. The online business in Nigeria grew strongly, with monthly active users up 37% year-on-year, and online gross gaming revenues up 26% year-on-year in content currency. while the agency business was more affected by the economic condition. The business delivered organic revenue growth of 5%. On a reported basis, revenues came to $147 million and delivered an EBITDA profit of $2 million, the product and market cost retaining a cash balance of $113 million at the end of December 2023. Kingmakers launched the SuperSportBet business in South Africa in January 2024. Its pre-game shows and live feed integration with SuperPix, as well as the playbook preview show, were key drivers for uptake and user engagement. Growth was further supported by SuperSportBet becoming the official betting partner of local soccer clubs, Kaiser Chiefs and Orlando Pirates. On slide 20, we reflect on IDETO, which has now become the global market leader in managed security services for video with a 22% market share. Strong execution and new customer wins has allowed it to more than double its market share over the past seven years. We've gained success in combating piracy, which is rising globally, especially in the streaming space. Outside of media security, IDETO solutions for connected industries are building momentum. Its first keyless solutions to one of the largest fleet operators in the U.S. market has resulted in the connected transport division more than doubling its revenues. In the gaming industry, revenues from new services lines increased to 35.7%. Overall revenues increased 17% year-on-year, and the trading profit margin came to 23%, so a good performance all around by data. After being founded the year before, Moment launched its operations and reached a milestone of processing $85 million in payment volumes year-to-date by the end of March. The number has increased to more than $215 million by early June. Moment played a vital role in the recent ZoomX relaunch, stepping up to fill in a critical payment gap by taking local and cross-border card payments in 44 markets. Not only is it supporting Showmax, but in January this year, Moment also started taking up payment volumes from DSCV. It already accounts for a significant share of payment volumes, which enables seamless payments for customers and more savings for us. Today, Moment already accounts for more than 30% of DSTV's payment volumes, enabling more seamless payments for customers and saving us money at the same time. In a busy year for Moment, they secured critical licenses in South Africa with more underway, and they built an extensive Pan-African network that will be enabled for use in the coming year. Along with other founding backers, we recently contributed $8 million to Moment's C++ funding round, in which they raised $22 million of funding at a post-money valuation of $82 million. Our stake in the business is 26%. That concludes our operational overview. I'm incredibly proud of the achievement of our business over the last year, especially considering the magnitude of external challenges that we had to counter. The teams did an excellent job to manage things that were under their control, deliver for our customers, and grow our new initiatives. I would like to invite Tim, our CFO, to take you through our detailed financial results.