SABC High Level Turnaround Plan November 2010

Driving Operational Efficiency  Financial constraints resulting in Government Guarentee and associated requirements  Lack of governance and internal controls  Increasing competition and proliforation of audiences  Negative brand and reputation of the organisation  Market pressures – weak economic climate SABC is facing a number of internal and external challenges: Increase Revenues Increase sales yield through revised pricing and creating schedule stability Improve programming quality and subsequently audiences TV licence collection strategies implementation Sales pricing strategy TV licence annual increase Intensified debt collection Broadcast levy in all TV receiving equipment LeverKey projects underwayAreas of change Cost Reductions Realignment of processes and DAF with new systems - create efficient processes organisation wide Effective governance and risk management Organisational redesign and right sizing Digitisation SABC News Channel on satellite New Media Strategy Enterprise Risk Management Framework This has resulted in the development of a turnaround strategy to address its challenges: Key Levers for Change SABC Today 1 Situational analysis Establishment of desired vision Development of turnaround strategy

Driving Operational Efficiency SABC Today 1 Situational analysis Establishment of desired vision Development of turnaround strategy 2 Enterprise Strategy Creating an enterprise lead organisation Operational & segment plans driven by enterprise strategy Through enterprise performance realignment with strategic deliverables, and thereafter drilling down to operational and segment level; a culture of performance can be created, which will aid in driving the enterprise to its desired state. To ensure effective delivery on its turnaround as well as its enterprise strategy, the enterprise needs to ensure that it is effectively resourced to deliver SABC is facing a number of internal and external challenges: Key Levers for Change Strategic Repositioning Organisational digitisation (systems, processes, library) Ensuring ubiquitous distribution – ensuring platform neutrality Establishing a favourable regulatory framework Appropriate funding model to assist organisation in meeting its public value objective Operating model and structure review Digitisation SABC News Channel on satellite LeverKey projects underwayAreas of change While focusing on its turnaround the organisation can not loose its visionary stance, its desire to remain relevant within its market. This therefore requires that while implementing turnaround, it also strategically repositions itself for the future, through its enterprise strategy which will guide operational and segment plans.

Driving Operational Efficiency SABC Today 1 Situational analysis Establishment of desired vision Development of turnaround strategy 2 Enterprise Strategy Creating an enterprise lead organisation Operational & segment plans driven by enterprise strategy 3 Resourcing for Change Strategic repositioning Implement efficient organisational structure design Appointments in strategic vacancies Through enterprise performance realignment with strategic deliverables, and thereafter drilling down to operational and segment level; a culture of performance can be created, which will aid in driving the enterprise to its desired state. To ensure effective delivery on its turnaround as well as its enterprise strategy, the enterprise needs to ensure that it is effectively resourced to deliver.

Driving Operational Efficiency SABC Today 1 Situational analysis Establishment of desired vision Development of turnaround strategy 2 Enterprise Strategy Creating an enterprise lead organisation Operational & segment plans driven by enterprise strategy 3 Resourcing for Change Strategic repositioning Implement efficient organisational structure design Appointments in strategic vacancies 4 Driving a Performance Culture Establishment of clear KPI’s aligned with Strategy, GG, Shareholder compact, MTEF Through the realignment of the enterprise’s performance with its strategic deliverables, and thereafter drilling down to operational and segment level alignment; a culture of performance can be created, which will aid in driving the enterprise to its’ desired state.

Driving Operational Efficiency SABC Today 1 Situational analysis Establishment of desired vision Development of turnaround strategy 2 Enterprise Strategy Creating an enterprise lead organisation Operational & Segment plans driven by enterprise strategy 3 Resourcing for Change Strategic repositioning Implement efficient organisational structure design Appointments in strategic vacancies 4 Driving a Performance Culture Establishment of clear KPI’s aligned with Strategy, GG, Shareholder compact, MTEF 5 Establishment and Implementation of Delivery Roadmap Through enterprise performance realignment with strategic deliverables, and thereafter drilling down to operational and segment level; a culture of performance can be created, which will aid in driving the enterprise to its desired state. The delivery roadmap provides the enterprise, operational and segment level management and employees with a clear and concise delivery plan on which to implement.

Driving Operational Efficiency SABC Today 1 Situational analysis Establishment of desired vision Development of turnaround strategy 2 Enterprise Strategy Creating an enterprise lead organisation Operational & Segment plans driven by enterprise strategy 3 Resourcing for Change Strategic repositioning Implement efficient organisational structure design Appointments in strategic vacancies 4 Driving a Performance Culture Establishment of clear KPI’s aligned with Strategy, GG, Shareholder compact, MTEF 5 Establishment and Implementation of Delivery Roadmap 6 Identify External Changes Requiring Strategic Review Change and review targets to ensure alignment with changes applicable i.e. enactment of PSB Bill, rollout of DTT, change in SABC Mandate Through enterprise performance realignment with strategic deliverables, and thereafter drilling down to operational and segment level; a culture of performance can be created, which will aid in driving the enterprise to its desired state. While consideration was taken during strategy development, of the impending external changes that might effect the enterprise, it is at the stage of their certainty that their effect is again reviewed and the strategy is realigned, should the need arise.

Driving Operational Efficiency SABC Today 1 Situational analysis Establishment of desired vision Development of turnaround strategy 2 Enterprise Strategy Creating an enterprise lead organisation Operational & Segment plans driven by enterprise strategy 3 Resourcing for Change Strategic repositioning Implement efficient organisational structure design Appointments in strategic vacancies 4 Driving a performance Culture Establishment of clear KPI’s aligned with Strategy, GG, Shareholder compact, MTEF 5 Establishment and implementation of Delivery Roadmap 6 Identify External Changes Requiring Strategic Review Change and review targets to ensure alignment with changes applicable i.e. enactment of PSB Bill, rollout of DTT, change in SABC Mandate 7 Strategy Assurance Creating an organisation of continuous improvement Broadcasting for Total Citizen Empowerment

Click to edit the outline text format Second Outline Level  Third Outline Level Fourth Outline Level  Fifth Outline Level  Sixth Outline Level  Seventh Outline Level  Eighth Outline Level Ninth Outline LevelClick to edit Master text styles Second level ‒ Third level Fourth level ‒ Fifth level SABC Turnaround Strategy Roadmap Leadership and governance Financial management & controls Reorganisatio n & people alignment Human capital development Improving return on programming expenditure RecoveryStabilisationSustainable Growth Q3Q4Q1Q2Q3Q4Q1Q2Q3 FY2011/12FY2012/13FY2010/11 Q4 Restoring credibility and brand Corporate governance controls Review and align DAF Fill strategic vacanciesFill key vacancies Achieve required target working capital levels Audit & Reporting compliance Expenditure policiesReporting and compliance Implementation TV licence strategy Unlock cashflowBalance sheet Operating model Strategic procurement process and principlesProcurement quick wins Organisational right-sizing Group-wide enterprise performance management system High performance culturePerformance Management Remuneration, reward & retention Sales control Implement network strategy across all channels and new media Network strategy Unlock cashflowMaintained required working capital requirements Increase transparency of operational effectiveness Regulatory and policy enhancements Implement new mandates as prescribed Support function service delivery and cost Improve sales yieldSchedule stability Distribution strategy Socialisatio n Sales revenue performance improvement SABC3 and News positioning Align news to network proposition Monitoring and evaluation Risk Management FrameworkRisk Management culture Business planning / Reporting Stakeholder engagement strategy Monitoring and evaluation The SABC has set out a roadmap that shows indicative timelines for key initiatives against “Recovery”, Stabilisation” and “Sustainable growth” phases. Where possible, “quick wins” will be implemented in the remaining months of the current financial year 9 SABC Turnaround Strategy Quick win Appoint marketeer Ring-fence commercial risk Monetise inventory and archive