OVERVIEW

The past twelve months evidenced a global economic downturn. Each business in the group played the field as it found it and each adapted as fast as possible to these new conditions. As a whole, the group’s growth was satisfactory.

Emerging markets are at the centre of our strategy. In aggregate and at consumer level they came under pressure, but fared better than developed economies.

Our recent acquisitions in the internet segment – Allegro, Ricardo and Gadu-Gadu – performed steadily. Associates Tencent in China and mail.ru in Russia expanded.

Our pay-television businesses proved resilient. When people experience economic pressure, they spend more time at home and pay television is an affordable entertainment option. We invested substantially to grow, and the gross subscriber base proves this.

Our technology business, Irdeto, was more impacted by the economy than our consumer-facing units.

Print circulations in South Africa and China held up, but advertising revenues were stagnant. In Brazil, however, Abril had a good year.

INTERNET

The internet segment recorded revenue of R3,8 billion, which stepped up after the inclusion of Allegro, Ricardo and Gadu-Gadu. Operating profit before amortisation and other gains/ losses was R128 million.

The e-commerce operations of Allegro (Eastern Europe) and Ricardo (Western Europe) generated revenues of R1,9 billion. The aggregate e-businesses achieved above expectations. New services were launched in some countries.

Gadu-Gadu in Poland now has 15 million registered users. A casual gaming portal and virtual network were added and further expansion is planned.

In China Tencent performed ahead of expectations with growth on most platforms. The Olympics increased traffic to almost one billion page views per day and peak concurrent users exceeded 57 million. The addition of several new games produced steady growth. Tencent’s contribution to core headline earnings increased to R1,2 billion (2008: R615 million).

In India ibibo is growing its small internet business, focusing on social media, search and advertising. In terms of an agreement with Tencent, the two companies will jointly develop the Indian business.

In Russia mail.ru expanded its base to 58 million active email users. This business contributed R87 million (2008: R49 million) to core headline earnings. It is maturing by developing multiple revenue streams.

PAY TELEVISION

Overall, the pay-television segment expanded revenues by 29%, thanks to subscriber growth. Operating margins diminished due to costs of building the subscriber base, as well as higher content costs resulting from increased competition.

In South Africa the base grew by 453 000 gross subscribers to 2 401 000. The mid-priced Compact bouquet proved the most popular. Advertising revenues retreated on the back of an economic slowdown.

In the rest of sub-Saharan Africa a focus on local content and SuperSport’s coverage of the Olympics delivered 230 000 additional gross subscribers, taking the base to 916 000 households. The Compact bouquet stands at 313 000 subscribers. More competition across the continent is reflected in higher prices for sport content.

Mobile-TV licences were activated in Ghana, Kenya, Namibia and Nigeria. Construction of DVB-H networks and employment of staff in these markets continues.

IRDETO

During the period Irdeto delivered some 15 million conditional access units to clients. Serving operators rather than consumers, its business model was more impacted by the recession. Consolidation of various businesses into the Irdeto group has reduced development spend and operating costs.

PRINT MEDIA

Our printing business, Paarl Media, suffered two fires, of which the latter caused the most serious loss of life and injury in the company’s history. Our thoughts are with the bereaved families.

Print media operations in South Africa generated marginal revenue growth of 3%. Circulation and readership of newspapers and magazines mostly held up, but advertising felt the pinch of the economic slowdown. In this environment, operating costs have been reduced and capital expenditure reined in. The impact of these savings should materialise in future.

The printing sector had revenue growth of 4%, although margins were affected by lower print volumes and exchange rates. The book publishing business is operating satisfactorily.

In Brazil Abril had an excellent year and its contribution to core headline earnings increased to R414 million (2008: R150 million).

DIVIDEND

STRATEGY AND PROSPECTS

We will continue our growth strategy. Rigorous evaluation processes are applied when new investments are considered. Our aim remains to deliver value to our shareholders over the medium and longer term. The group has a strong balance sheet.

STOCK EXCHANGE LISTINGS

GOVERNANCE AND SUSTAINABILITY

Several of Naspers’s subsidiaries are governed by independent boards of directors, all of which have established their own governance practices and subcommittees that comply, as appropriate to the companies, with the necessary governance and regulatory requirements.

On an ongoing basis Naspers continues to evaluate areas where governance at a corporate and subsidiary level can be strengthened. The implications of the new Companies Act in South Africa, as well as the King III Code on Corporate Governance will also be analysed and appropriate steps taken.

Naspers’s sustainability report according to the Global Reporting Initiative (GRI)-application level C, is available on our website (www.naspers.com).

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