GCV Presentation, 21 May 2013 Charles Searle 15 Years of Investing in the Internet

2 Naspers group history Naspers internet group

3 Going from here...

4 …to here We operate in 133 countries across the world

5 Our history – growing organically… (listed) listed Embracing changes in technology along the way

6 …and through acquisitions listed etc etc.

7 Some early strategic insights… Transition to electronic media Potential of internet identified early Emerging market opportunity Term BRIC coined in 2001 * First Satellite TV operator ex-USA * First internet investment in 1995 (Yahoo founded in 1994, AOL earlier…) * MIH investing in China since 1996

Global platform operator Pay-TVe-CommerceI-Media DTTDTHClassifiedse-TailPayments South Africa Sub- Saharan Africa Central & EEU Latam Africa & Middle East South- east Asia Type Format Geography 8

9 Naspers group history Naspers internet group

10 Enter early, establish leadership, build barriers to entry Less competition from foreign multinationals – as focused on own domestic markets Ride the economic growth story But, emerging market competitive advantage is largely over…. Rationale for investing in emerging markets

11 MIH in SAMIH in China & SE Asia M-Web ISP China Thailand Indonesia History of initial Naspers internet investing

12 Mistakes made and lessons learnt Expat management teams… Expensive products… Big budget marketing strategies… Shareholder control issues… Just too early in some markets…

13 Investment in Tencent Change in MIH investment strategy Key strategic strengths identified early  Outstanding local management team  Instant Messaging always on - could expand into many directions ?  Solved certain needs at that time - e.g. Mobile QQ acted as SMS interconnection gateway between rival mobile networks  Technology, long-term focus  Ability to bring in new talent to complement founders Facts and figures - US$32m initial investment (50%) - US$69bn market - 825m monthly active QQ users - 32,000 staff; 65% engineers

14 “Halo” effects … Tencent success created a “halo” effect… Series of investments in Mail.ru in Russia followed …another great story! But…  Limited social media opportunities elsewhere  “Halo” effects don’t last forever  Where to now ??? - US$6bn market cap - Naspers/MIH : 28%

15 e-Commerce to dominate the internet Sources: Morgan Stanley, PWC Billion US$ Online Shopping Online Advertising Online Gaming Movie Box Office Sales 13x 19x 6x

16 e-Commerce: strategy pivot Payment platforms Portals Instant messaging and Social networking Mobile value-added services Online games E-commerce Community Lead-generation B2C (price-comparison etc.) Other Vertical e-tail Marketplace (facilitation) Classifieds (free, paid) Payments e-Commerce General e-tail e-Commerce now our core focus

17 Growing through acquisitions: M&A activity Total acquisition spend (US$m) 377 Subsequent acquisitions

18 Growing through development spend Development spend (ZARm) 3yr CAGR 85% 87%

19 e-Commerce: revenue growth Revenue (ZARm) 3yr CAGR 42% 61%

20 e-Commerce: revenue breakdown Revenue by typeRevenue by geography

21 e-Commerce: value creation e-Commerce value creation over time Value creation Value Losses

22 A few lessons learnt… Local entrepreneurs… Skin in the game… What problems being solved ? Focus long-term and build scale… Share experiences… Be prepared to pivot every decade or so….

23 Q & A