🔒 PREMIUM: Naspers lifts its skirts in New York: How it intends closing 40% discount

LONDON — The JSE’s most important stock by far, Naspers, trades at a 40% discount to the value of its underlying assets. This week the media group’s executive team arranged its first ever Investor Day in New York. Here’s the most important hour of the event – the keynote by CEO Bob van Dijk and the Q&As with himself and at the closing when he has FD Basil Sgourdos alongside. A must-listen for anyone invested in the JSE, where Naspers has a weighting of 20% in the All Share Index. – Alec Hogg

Century old Naspers is now one of the biggest media companies in the world. It started in Cape Town. It began transforming in the late 1990s, when CEO at the time, Koos Bekker, and his right hand, Antonie Roux, took a ‘throw mud at the wall’ approach towards the internet and particularly investing in emerging market countries. Well, one of those pieces of mud stuck, and stuck beautifully. It was a Hong Kong based company called Tencent that was an investment of $30m for Naspers, back in the late 90s. That investment today is worth a staggering $136bn. It has transformed Naspers’ fortunes. It’s also made a huge impact on the retirement savings of many South Africans. Naspers is now 20% of the JSE (Johannesburg Stock Exchange) but the problem is the share price trades at a huge discount to the value of what it owns in Tencent alone. In fact, when you take the whole of Naspers’ assets there’s a case to say that the company trades at a 40% discount.
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Now, you could put some of that, maybe half of that down to it being listed on the JSE and the concerns that international investors might have about holding companies and being able to unlock their assets but 40% is way too high. Bob van Dijk, who is the CEO of Naspers, and has been in the job for 3.5 years, succeeding Bekker who is now the chairman. He went off to New York this week. He took his top team with him and had the very first Naspers investor day for New York investors. They pulled together a crowd from the best of Wall Street and gave them a show that South Africans will be hoping will bring more investors into the stock and close that 40% discount.

Bob Van Dijk, chief executive officer of Naspers Ltd., gestures as he speaks during an interview at the Media 24 Ltd. office in Cape Town, South Africa. Photographer: Halden Krog/Bloomberg

Bob van Dijk gave the keynote address and we have that to follow here, after which he answered questions and then at the end of this audio you will get the question and answer session between himself and the financial director. It’s really worth listening to, given that Naspers is 20.5% of the JSE All Share Index, which means pretty much every single South African retirement investor or any other saver, who has money in the stock market or one of the exchange traded funds has to be interested in what happens to this huge company. So let’s listen in to CEO Bob van Dijk. He’s on the stage in New York.

If I have to summarise in a very short sentence what it is that we do as a group, if you’re unfamiliar, is we look for opportunities in growth markets and we typically catch them earlier than other people do. To materialise those opportunities, we partner for the long-term with exceptional entrepreneurs and if we see things that work particularly well we accelerate them to the maximum possible and we weed out underperforming assets as quickly as we can.

Some of you may notice, I’m a data scientist by background so, I love seeing things in numbers. You’ll see a lot of numbers today. For somebody who doesn’t know the group I would probably summarise Naspers with three times the number 100. So the first 100 is our age. It’s not my age but it’s the group’s age so, we are about 103-years-old. We started as a single newspaper in SA but by now, more than 80% of our business is actually outside of SA. That percentage is going up quite rapidly. The second 100 is our market cap. We are a sizeable company by any standard. The third 100 is the development of our revenue mix, so we’re currently not quite at 100% online but we believe we’re going to get there quite quickly.

I think that actually touches upon a point that is really core to what we are. What we have done over many years is adapt ourselves to change and that adaptability you can actually illustrate in many ways. I thought the next picture actually introduces it quite well so, if you look at the top orange line it basically shows the market cap of Naspers as a percentage of the NASDAQ. What you see is basically that we have increased our relevance versus that benchmark over time very significantly. Again, that speaks to that adaptability that I was mentioning. To contrast that, at the bottom line, we actually took publishing and broadcasting, and shown that as a percentage of the S&P, which basically shows that pretty much a decade ago when we were largely a publishing and a broadcasting business. That has not increased in relevance compared to the overall market. Again, that speaks to adaptability.

I think it speaks to another very fundamental component of what we stand for and that’s ambition. We are a group that pursues growth and we’ve done it for a long time, and we’ll continue to do that for a long time, going forward. A good example is actually what Martin has done so, when Martin had a very successful classifieds business in 20 countries what he did was he launched 20 more and that’s what we like to do. So, if I take you back a little bit in time I thought I would illustrate how that transition from a more traditional media company to a predominantly online company has gone.

If you go back 10 years, to 2007, the percentage, which is at the bottom, of our revenue that comes from online propositions was only 11% so, we were still very much a TV business and a media business. If you then go 5-years further, to 2012, that 11% by then had grown to 34%. It’s meaningful but still predominantly a traditional media company. If you look at where we are today – 77% of our revenue is coming from online businesses and we see that number go to 100% within a fairly reasonable amount of time. There are two main reasons why that’s the case. The first one is, and you will probably know this quite well, but our online businesses are growing much faster than our traditional business so naturally because of the mix of the businesses you will see that go up quite quickly.

The other transition and actually, Uvashni will touch upon it is that also our more traditional businesses are becoming more digital quite quickly and that’s a top priority for us. Now, if you see this type of transformation and you think about what we want to achieve going forward we think to ourselves, what are the key pillars that drive this? Now, at the core of what we do, and I mentioned it earlier, is we partner with entrepreneurs, with exceptional entrepreneurs and if you look at the biggest successes that we’ve had as a group there are almost without exception, driven by exceptional entrepreneurs. Driven by their tenaciousness, by their skills and how they know local markets much better than anybody else would.

Ma Huateng (Pony Ma), chairman and chief executive officer of Tencent Holdings Ltd., attends a news conference in Hong Kong, China. Photographer: Paul Yeung/Bloomberg

Pony Ma is an excellent example, the founder of Tencent. He has built one of the most impressive companies in the world. Alec Oxenford, who some of you may have met, founded both the OLX business that we partnered with him with, and later the Letgo business that Martin will also speak about, who is an excellent example of a phenomenal entrepreneur. Then the type of businesses we like are businesses with platform potential. When I say, ‘platform potential,’ what I really mean is businesses that can become a regular customer destination. Those are businesses we particularly prioritise. Those are particularly attractive because they address fundamental needs that customers have and that we believe are the best businesses, over the long-term.

We are an ambitious group and we’re a growth group and that typically drives us to pursue opportunities in growth markets but we also pursue growth opportunities in other markets, if they present them. So, as a final part of what we look for in assets that we get excited about is we look for leadership positions. Why do we look for leadership positions? We know (A) that they typically have much superior returns as opposed to runner up positions, just about any business that holds true, and (B) is that they tend to be much more defensible over time than runner up positions. So, in summary what we do is we look for opportunities in growth markets. We partner for the long-term with exceptional entrepreneurs, and then we push winning businesses propositions very hard, and whenever it doesn’t work we move out quickly.

Now, I wanted to make a little bit of a change in tact and talk a little bit about a journey that we, as a leadership team, have seen in the last 3.5 years. I joined or I took the role as CEO about 3.5 years ago, and I think that that period of 3.5 years basically, you can cut up in about three distinct phases. Let me start with the first phase that was really a phase where we reset the portfolio we inherited. I think we inherited a number of assets that had promise but to get them to their full potential there was a good amount of work to be done. One of the things we did was we organised these businesses into cohesive segments. The other thing we did, after we did that was bring on board exceptional talent that can run these different segments, and you will see them here with me today, Martin, Larry, Christina, and Uvashni. Those are people that have a great deal of expertise particularly in the area that we have deployed them in and have taken those businesses to a completely different level.

We also took action on a number of assets that were underperforming and we exited them. We did a number of them quite quickly and many of them we actually made a return on as we sold them. That really then took us into the second phase, which was really around acceleration. Now, we’ve seen that during that phase and you would have seen it during the regular results announcements we do, accelerated growth and that really, if you look, was driven by more focus. We really focussed on those segments that we prioritised but also, better execution by leadership.

Also, a key set of actions we took in that phase was around consolidation. Some of you will know that we consolidated with Schibsted in a number of markets where we were competing in classifieds, and I think that it suited us well. We also did a consolidation in the India travel space, where we owned a company that is called Goibibo and we merged that company with MakeMyTrip and together it became a very clear leader in the India travel space. In this phase we also reallocated capital from assets that we thought were value peaking and an Allegro transaction that was executed about a year ago is a good example of that. We thought that we could get a better return from that capital if we invested in other assets for you. Now, we’re really in the third phase and the third phase for us, around crystallising value so, it’s a priority for us and you’ll hear more about that more today, to grow e-commerce to profitability and we have these core segments, and some of you may have heard me speak about this before. We want to develop them into large, cohesive, and valuable segments – that’s a priority. Then finally, as I mentioned before, we’re a growth company so.

If you look at our current portfolio of assets it’s actually a fantastic starting point for that and this is the way we look at our portfolio. Every class of assets that we have has a distinctive role to play in our overall portfolio and I’ll walk you through them step-by-step. So, first, at the very left-hand side, we have the business that we call ‘potential.’ As the word says, these are early stage businesses and they are typically maybe five, six, or seven years away from their full potential. They’ll consume cash at this point in time, for sure, but they have potential for the future so, Larry’s ventures team is the team that works primarily on finding these investments. Again, we’re a growth company. If we want to grow five years from now we need to have businesses that have that potential today.

The second category of assets we call ‘proven.’ Now, they are typically not profitable yet. They’re growing quite fast and they are basically going to be a key driver of our growth say in a number of years from now. Good examples of this asset category are eMAG, and Flipkart and Christina will cover both those businesses later today. Then the next category of assets, again crucial for the portfolio, is what we call ‘play to win.’ These are assets that are growing rapidly. They’re actually close or almost at profitability. In Martin’s case, at profitability. They are going to drive the majority of our growth in the year to come. Good examples are the OLX Group, as I mentioned, but also PayU, and our online food-delivery business.

Then we have profitable assets and again, they play a key role in our asset portfolio because they fund the development spend and the operating losses from the other categories that you’ve seen before. Our MultiChoice business – that Uvashni will cover, is our biggest one at this point in time. Finally, we have assets that are already public, Tencent and Mail.ru are the best examples, and we hold these assets because we believe they have the potential to appreciate substantially in value over time. If you look at the last year, you may know that Tencent more than doubled in that period and actually, Mail.ru went up by more than 50% in the last year. Now, it’s a priority for us to move proven businesses to ‘play to win’ and ‘play to win’ businesses to ‘profitability.’ You’ll hear that theme come back throughout the day.

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If we look at that portfolio and I hope that definitely after today you’ll feel the same that this is a great set of assets. What it does highlight, and it’s clear to many of you, that there is a value creation opportunity. The picture you see on the left is basically an illustration of how the value that the analysts that look at the different parts of our business and put on them is substantially higher than what the company is trading at, at this point in time. So, the number there is 18. We say, we expect a company with our structure to have a discount maybe in the order of 20% for liquidity reasons, etc., but it’s much higher at this point in time. The nominal number is around 38%, at this point in time, and that is clearly too high. I wanted to make it very clear that we, as a leadership team, take this seriously and we think it’s not something that is sustainable and we want to make sure that we change it over time.

Now, again, Basil will spend a good deal more time on this topic but just a few words on it from my side. First, if you’ve analysed the increase in our discount versus the sum of the part, at least we have done the work on that in quite detail. There’s a good chunk and the majority of that is driven by structural factors. Capital outflows out of SA being probably the most prominent one and that is something that is hard for us to control. However, there are a lot of things that we do control and that we, as a management team, can do to improve this over time. So, the most important thing what we think we need to do is we need to build excellent businesses and we need to build excellent businesses and in particularly also, profitable businesses so, getting our e-commerce business to profitability and do that in an accelerated way is a top priority for us, as a team.

We also know that if we give you more insight it makes it easier for you to appreciate what we have created so far so, we need to increase transparency over time. We’re taking steps in that and I hope you appreciate that. I think there’s further disclosure that we can do and we really appreciate the guidance and inputs we get from our investors around that. I think overall, we can do a greater investment in shareholder communication. Today is a start and curiously, here after if we think it’s useful and then we can do more of this in the future. Now we, as a leadership team, think this will help. We think it will meaningfully help. It may not work tomorrow but we think it will, over time, reduce this discount. If structural factors persist there’s obviously, other structural solutions that we will consider. Now, as a leadership team, and I hope as investors, you’ll agree. We see it as our most important priority to deliver an excellent return on our investments and there we have a very solid track record so, let me show you a few examples.

A construction helmet sits on a desk at Tencent Holdings Ltd.’s headquarters in Shenzhen, China, on Monday, Aug. 22, 2016. Photographer: Qilai Shen/Bloomberg

We’ll start on the left with Tencent so, over a period of more than 15 years the average annual return on that asset has been over 60%. Probably one of the most successful investments in modern history but there’s more than that. If you look at our classifieds business, and here we’ve excluded Letgo, again, if we look at when we’ve done those investments over time and we’ve looked at what analysts put on the value of the assets. So, it’s not our value it’s rather an average of what analysts have put on it. We’ve seen an average of about 30% return per year on that investment. Flipkart is another example. Our investment level of about $600m and again, an annual return in excess of about 30%. If you look at food-delivery that’s a very pretty picture. It’s driven by two important assets. One, we own an asset in Latin America called iFood, it’s grown phenomenally well. We haven’t invested much in it but it’s very valuable and Larry will tell you a whole lot more about that later today. We’ve also done an investment in Delivery Hero, in which we did pre-IPO for a good chunk and we’ve done it at a price that basically results in a very significant short-term return so, these are examples but it’s also important to look at the overall return picture. Again, that picture is also very encouraging.

There are two different parts to the picture. If you look on the left-hand side we show how investments in a certain year have generated an annualised return so far. As an example, in our financial year 2014, of all the investments we’ve done in that year the average annual return has been 17%. Now, the good news in that picture is that that has increased over time so, we’ve become better at deploying your capital so, from 17% we went to 24% in the financial year of 2017. In the first half of 2018, we’ve seen a big spike. Again, I think the trajectory is the correct one, and it’s been driven to a good extent by our food-delivery investments, which had a phenomenal short-term return. The picture on the right is maybe as important. It shows, what is the capital that we invested in our current portfolio of e-commerce assets and again, what is the value that analysts put on their portfolio, at this point in time, on average?

So, if you take that we’ve generated about a 23% average annual return on those e-commerce investments. We think that’s a good story. Now, what is important that if we do these investments that generate good returns that it also translates in financials and the good news is, is that we’re starting to see that picture. This shows e-commerce trading profit margin in the different financial years, and the last data point is actually our last half. So, what you see here really, is the investment cycle that we’ve been through so, in 2015/2016, we increased our investment in e-commerce. We went into more countries with classifieds, we went into more business with payments, and we went into all the businesses. So, on aggregate we saw more loss-making businesses and a decrease in that trading profit margin.

Now, in the financial year 2017 you saw a small improvement so, we’re seeing the right path there and a big improvement you really have seen when we released our first half results recently, when that trading margin went to about -20%. It’s not that we don’t invest in new things any more. What is really happening here is that those bigger core bets that we’ve done are improving profitability really strongly and they’re doing that in a faster way than other new bets that we’re doing so that’s what you basically see here. We are very much focussed on continuing this trajectory and we hope you appreciate it.

Flag map of the People’s Republic of China

Now, before I move to my close I wanted to say a few words about why we, as a leadership team, are so excited about Tencent, still. There are many reasons why we are excited about Tencent and we could easily fill an entire day with it, as Tencent maybe does at some point in time, but I just wanted to highlight a few. What this picture shows is how the number of mobile internet hours in China has developed over time and it shows how it’s built up from different properties. The shading shows which overall company owns those properties. I’ve got lots of things to say about this. I think the first thing to say is there’s obviously a rapidly growing mobile online world in China – that will be a surprise to no one. The other thing to call out that we are very excited about is the share that Tencent has of this online mobile hour picture. It’s about 54%, at this point in time. If you want to calibrate that – the number for Facebook in the US is about 19% so that’s a phenomenal position in a phenomenal market and just the reason why we are excited about China, and probably why you are as well, is that the online population in China is about 3X of that in the US. The online retail penetration as a percentage of total retail is about double, it’s from 10% a year to about 20% in China, give or take. Mobile payments in China is about 50X to the US, at this point in time. If you take this position together with the size of that market, there’s a lot to be excited about.

Now, given that market opportunity and the position that Tencent has they’ve also managed to accelerate revenue growth and capitalise on that position. Here is shows per quarter, year-on-year revenue growth for some of the largest internet companies in the world. You see what a great run Tencent has had in accelerating that growth from an ever-larger base – it’s pretty rare to see such a picture, I’ve never seen it before. Now, I think one of the things that Tencent does, and I think many of you know but it’s important to call out, it’s not just the core business they run. They also invest in exceptional other business, like Mat1, like JD, and those businesses again, they plug into their ecosystem and that enhances the potential and the success of these companies. So, as these businesses are successful, Tencent is even more successful and we think that bodes well for their ability to not hit growth limits any time soon so that’s why we are extremely excited about Tencent.

In close, I hope it’s clear what our priorities are. We want to accelerate the path to profitability of our e-commerce businesses. We want to pursue scale actually, for all our segments, it’s relevant for all. Then there will still be certain assets that are non-strategic, for which we will value optimise over time. As I’ve said before, we are a growth company so we’ll continue to grow and we’ll selectively invest in the assets that we think can get us in that next wave of growth, which we’ll need. On a more technical level, we are prioritising now AI in everything we do, in all of our businesses and not in some of our businesses. In all of our businesses it will be transformational. You’ll hear it come by several times today but we’re also, as I’ve said earlier, a return focussed company so, we’ll focus on cost reduction across the portfolio, and margin improvement wherever we can.

Finally, we want to make sure that we have a healthy balance sheet that supports us in getting this done so, that’s my story for today. I want to open for questions that I’m sure you’ll have and again, there will be plenty of time now. If you want to ask some questions about a particular segment – I might defer them to after that segment presentation, if they’re covered later so, the floor is yours. I think we have eight people running around with microphones, wearing lovely orange shirts so, if you want to ask a question raise your hand and we can get started.

Hi, thanks Bob. I’m Cameron from Jeffreys. I have two questions. One was to kind of just to understand it. On one of the ‘creating value’ slides you had the return on investments in certain years. So that’s say, is what you invested in 2014, and what it’s worth now, the ROI on that so, it’s the vintage in each year?

That’s correct.

Okay, I understand, which is obviously useful if you’re going to be an investor people want to understand their returns on your investments. The other one then was related to one of your comments about structural factors being a significant reason for the wider discount. You said if that persists there are structural things we can do, if I can paraphrase. Could you enlarge on what structurally you could do, if it’s a SA capital flows issue? Sorry, I’m putting words into your mouth but what are the structural issues and what are the answers?

So, the question is what structural actions can you take if we see a continued high discount? If you don’t mind, Basil will address that in more detail, this question. James, can you actually make sure we note the question that if we don’t appropriately cover it we’ll come back to it at the end? I don’t want to steal Basil’s thunder entirely.

Yes, hi, I’m from Morgan Stanley. Just on the last meeting is there a timeline that you have in mind as to how long you would wait before you decide that you’d exit that particular business? Also, in terms of the sectors that you are looking at for investments are there any particular sectors you are more focussed on and any sectors you would not be looking at, at all?

I got the second part of your question but not the first part. Would you mind repeating that?

Yes, sure so, when you look at your businesses, which are currently loss making how much time do you give them before you decide that you need to exit?

So, we look at it slightly differently and maybe its good to take a quick step back at how we run our capital allocation process because in the end, our capital allocation process is probably the most important thing we do. On an annual basis we basically ask each of our businesses, not only the new ones but also the existing businesses to submit a business plan. That business plan fundamentally says, this is the capital I require and this is the return I’m going to get you. These are the operational metrics that will tell you we’re delivering what we’re promising to you. Now, what we do during that business planning period is to make sure that we are happy with those returns. In some cases, it can take years so, for example I think Martin’s initial classified business plan was about six years ago that order of magnitude said, probably I’ll turn profitable in about six years. Then he submitted a set of interim metrics that we could track that will give us the comfort that he’s actually executing. In Martin’s case, we waited for six years because we realised he was building a great business but again, every month we check in with Martin to see is his delivery in line with his plan? Do we need to adjust the plan or do we need to rethink the IRR, or are we happy with the IRR? So, there’s no number of years as long as people deliver on plan and we are comfortable that we get a return, and we like sooner rather than later but some of the best investments take some time to get to full fruition and as long as the IRRs are good, that’s fundamentally what we care about. That’s to your first question.

To your second question. If you look at how we have allocated capital and again, I won’t steal Basil’s thunder, is actually being quite focussed on our core segments and I don’t expect that to change. So, I think the capital we allocate in the next few years will, and it’s hard to speculate on future capital allocation, but we’ll prioritise the key areas we’re in today and we’ll make smaller investments in other areas but we’re unlikely to go within the majority of investments into new areas.

Hi, Steve Sugary from Sainsbury Research. Thanks for coming to the States. I know you’ll tell us a little bit later on what you think the solutions might be for the discount but could you just talk a little bit about what the perceptions are in the market that lead us to this point? And some of the factors that the market thinks are the reasons for the discounts so, not a solution but just how we got here.

So, the question is what is driving the discount up? There are a few factors in it and again, there’ll be many opinions, particularly here in this room, on what those different factors are. I can speak to the ones that are very clear so, our discount was typically run between 20 to 25% for quite a long time. When it really started changing is about 20 months ago, or somewhere around that timeframe, and what the main factor is, is that there were very significant capital outflows out of SA, between $15bn and $20bn that went out of the market mainly because investors see the country risk as relatively high, given the political turmoil. We are about 20% plus of the index, we’re the most liquid stock in the market so, we see that of that outflow we take a disproportionate share and that’s been particularly painful. I think some of our shareholders here will say, we also want to see your e-commerce businesses turn profitable. I think we’ve heard that message loud and clear, which is why it is one of our top priorities.

Good morning, Bob. JP Davids from JP Morgan. We’re setting up this strategy here and looking at the key execution risks, when you’re coming up against a Facebook, Amazon, and a Google, and for that matter SoftBank. They seemingly have a lot more money than you and a better ability to hire talent. Can you discuss both those points, i.e., to what extent is your strategic execution hinging on your ability to outspend and to hire the best talent in the industry?

Thanks that’s excellent questions. Maybe I’ll start with the second, our ability to hire talent. I must say that it’s been, in the 3.5 years that I’ve been in this role, I’ve never not hired anybody that I wanted to hire. I think what sets us apart is that senior people in our company are all entrepreneurs. They all run a business. We’re not a metrics company, we’re not a corporate company. That means that if you have a job in our company you actually have a job and you run a business that matters to us. When I’m thinking back to my own personal preference great talent typically, wants to have responsibility, ownership, and have their real shop and that’s something we do, I think better than just about any of the other companies that you’ve mentioned, and it’s also the kind of people we want, frankly. So, you don’t have to be a founder but we want everybody to be an entrepreneur and people get super excited about having responsibility. That’s the second part of your question.

The first part is an interesting one. I think the answer is actually quite different for the different companies you’ve mentioned. I think we compete with some in some markets and it usually works out well. I think again, Dick, probably needs to take an example so, let’s take Amazon, a fierce competitor with Flipkart. If I look at the results that Flipkart has had in that market, given at how much Amazon has spent. I’m exceptionally proud of the quality of the engineering and the entrepreneurs there so, there you don’t have to match Amazon Dollar for Dollar. You can actually still gain market share while they’re spending a ruthless amount of money. I’m very encouraged by that.

SoftBank is an entirely different matter right, an operator in the telecom space, but an investor in our space. I don’t want to speculate about their overall impact on the ecosystem. We’ve not actually, competed for deals with them so far. We are a great deal more selective right, we invest thesis driven or early stage. They invest broadly in later stage, and we might run into them in some spaces but we’re actually very happy that they co-invested with us in Flipkart recently but we haven’t competed for deals. They might push up overall valuations, which would be annoying but again, we don’t deviate from our ‘why’ focus because of what they do.

Hi, Jason Kirschner, from Emerging Sovereign Group. Some of the focussed verticals that you’ve highlighted, like classifieds, or food-delivery or fintech, are all mostly micro payments type of businesses, high frequency transaction type, both platforms. Are there others that fit that categorisation that you’re out there looking at, maybe something like ridesharing sharing or are there other types of things?

An excellent question. We like high frequency businesses. We think they have the potential, and I mentioned platform businesses but high frequency platforms are typically the most attractive ones. We’ve stayed away from ridesharing. We probably missed a few investment opportunities that we just didn’t see the potential return from and we get proven wrong. What we prioritise in our investment process is that what we do invest in gets right, and again, Basil will show you a little bit more around our rate of aphelia, etc, which is relatively good, which also means you’re going to miss some. Food-delivery is a high frequency case, which we’re actually really excited about. Again, I don’t want to steal Larry’s thunder but if you look at those businesses and where they are today, I think it’s going to be similar to the way we thought about ETEL a decade ago so, the potential is probably 10 to 50 acts of what it is today.

Hi, Bob. It’s Chris from UBS. Just a quick one, and apologies if its pedantic, but you mentioned in the outset that you add 77% of revenues online and you’ll be moving that to 100% in the near future. I’m just wondering what that means for the print and pay TV businesses, which clearly still have a very high portion of non-online revenues?

Sure, I think as I mentioned, there are two facts of the change and mix. If you look at our print business it’s actually not growing, right. It’s actually shrinking. If you look one level deeper at our print business, as you see within that, our Media 24 group, there are quite a few online businesses that are growing, 50, 60, 70%. I don’t believe anybody will read a newspaper five-years from now. I don’t think anybody will watch linear television five or maybe ten years from now. Maybe sports is the exception so, I think the timeframe for those businesses might be different but the end point is very clear. I think the way that I think about those businesses is also that transformation for them is probably even more urgent than for other businesses. If you don’t change, you’ll die, and the conversation that we have with those businesses are all around make sure that you don’t, in transformation to new technology, lose your relevance to customers.

An advertisement for Golf Digest magazine sits on display beside a statue of explorer Bartolomeu Dias outside the offices of the Media24 Ltd., operated by Naspers Ltd. Photographer: Graeme Williams/Bloomberg

Hi, Bob. It’s Mike Gresty from City. Just back to that IRR slide. The last couple of years have probably been particularly good for tech, and hence it’s certainly helpful for your IRR over that period. If you go further back arguably, it’s been a little bit more hit and miss, and I was wondering what are the learnings, or what are the mistakes that were made if you take a longer look back over your history and internet that you probably will not, as you see it, repeat going forward? So, if the cycle turns down, hopefully Naspers is a relatively outperformer.

The most important thing is don’t invest big in something you don’t understand. I think that’s something, if I look to all the bets that has occurred sometimes, and you’ll see a slide from Basil later, I think where we’ve lost money is when making a bigger bet before we had a true understanding of the business model, and I don’t think we’ve done that, at least not during my tender and I have no interest in doing that.

Hi, following up on betting big. Has your investment strategy changed as your market cap has grown? Obviously, it’s wonderful to find Tencent-like investments that can compound at 62% over a decade, and if there are more of those, congratulations but can you continue to make 200 or smaller investments like Tencent? Or do you have to look for the ability to bet big in a business you understand, but to bet big in order to continue to move the market cap in a meaningful manner?

That’s an excellent question. I guess there’s two parts to that. One, is do you have to change your investment perspective, and can you move the needle with investments of say, the smaller size? We like all our children equal and if we get 100 great investments of $100m, we’re happy about those. I think we’ve shown in the past, of us being able to actually buy smaller assets, bring them together and build a fantastic business. That’s actually, at the core of Martin’s story and even at the core of Laurent’s story so, I don’t think you necessarily have to do $1bn deals to get scale, I think that’s one part of the answer. The other part of the answer is, we’ve actually done some more chunky deals, right. So, we’ve spent more than $1bn on acquiring majority veto. We’ve spent very sizeable amounts in food-delivery with Delivery Hero recently. Partially because we realise and we do want to build a big business and even though I think those are still relatively early stages and we’ll end up writing a bigger cheque but I think that’s still the right thing to do.

What do you do when you’re confronted with competing in a market where you’re playing against someone from Wall Street investors don’t require, what I would call, an economic profit? I’m clearly, thinking about Amazon because my opinion, and it’s just my opinion, if you take out Amazon web services Amazon has really never shown an economic profit and it’s a non-Amazon web services business.

Again, a very strong question. I think Amazon is a fierce competitor. They have the willingness, ability others have, but the willingness to deploy capital, which they are very patient to see a return, if ever. We compete with Amazon really only in the Indian market and what I’ve been encouraged by is that if you take Flipkart, which is the company that is competing with them, has an exceptional engineering focus. It has the best engineers in India and I think if I look at what they’ve achieved with less money in the last year, it’s really about, and maybe the simplest way that I think about it is, if you have Amazon who are an extremely well capitalised, long-term company who is willing to deploy massive amounts of money but they are largely a US based company that has largely, US based engineers that have worked on many products. That then get deployed in many markets. So, in India, Flipkart is an Indian company with Indian engineers that focusses on India only. It does nothing else and it has people that are all from India. So, very engineering focussed. Very local focussed and I think it’s proven to be a recipe to compete with a player like that. I would be very unhappy competing with Amazon’s core market though.

I wonder if you could clarify for us how the company thinks about, perhaps if we fast forward three, five, or six years from now, when many of your investments will obviously be more mature. Tencent first and foremost, with perhaps classifieds, etc., when, if ever, will the company diverse, spinoff or separate itself from some of these businesses, which will become much larger and more mature, what’s the strategy?

Yes so, the strategy is actually quite simple. What we do, and we do it on a regular basis, we look at the return that we see we can get on holding onto an asset versus parting ways with it, and there we put a high bar and we are very pragmatic. If we see they’re going forward and we don’t believe we’re going to get a substantial return on holding onto an asset or we get a better return on consolidating, selling, doing an IPO then we’ll do it. An excellent example is our Allegro business. We sold that business for $3.2bn a bit over a year ago. It’s a great asset and the people who bought it are probably happy with it. For us, we saw excellent market conditions to get a high price for it. It was actually diluted for our growth and we didn’t think we were going to get a better return by holding onto it. So, we look at future return that we expect based on what we know over the market. If we don’t see the right picture then we’ll part ways.

Hi, I’m Ramon from Prince Street Capital. This is maybe a corollary to the previous question but how do you think about when the appropriate time is for the businesses to go public? I think if you look at it right now in the private market capital seems to be a pointer for companies who are able to achieve valuations that previously would have been only available to them when they go public. So, how do you think about when the appropriate timing for that is?

Yes, that’s a fair question. If you at our past, we’ve actually been very supportive of IPOs of our portfolio companies before and I think there will be potentially, other occasions in the future. I think it’s a trade-off between where companies are in their life stage and markets. If you want to make significant strategic moves that maybe cost money it’s much easier to do that if you are a private company. If you’re cash consuming in a significant way I think it’s generally better to be privately held rather than be a public market itself but there will be businesses that will fit the bill and we’ll be pragmatic about it. Another consideration is that if we don’t see the value of our businesses has crystallised in our share price over time, that might be a way to crystallise that value so, we think about it regularly.

Which business do you think will be first to list of the stable that you have today?

I think that’s very hard to speculate on.

Bob, you’ve built a great investment record than anyone here in the room would happily trade you for but what was it, when you looked at the right sharing businesses that made you decide not to invest in it and what do you think of them today, and do you still think there’s an opportunity? A lot of people are still obviously, investing large amounts of money in this space. Is it something that is still on your radar screen but I’m interested in your thought process there and your view of the industry.

Yes, and you might think my process is somewhat inferior because we decided at some stage that we didn’t want to invest there. I haven’t been following this space in much detail since because I think by now it is too late to make a return, or the kind of return we would like to make on it, that’s my view. One of the considerations at the time was how defensible is a leadership position in ridesharing so, there’s a technology advantage that one may have? But the ability to sustain high margins in the face of competition is one that I never got personally excited about. We see if it lifts and it proves to be true.

John Kim from Deutsche Bank, two questions. I’d like you to just talk a little bit about what senior management and the board think about the sort of constraints you face, being domiciled on the JSE, and possibly about constraints for considerations around the super voting structure. So, is there a scenario or what would need to be true to kind of rethink the (A) end shared dynamic, and the primarily listing on the JSE?

The primary listing actually, Basil will address and I won’t steal his thunder. The bottom line is to change it will be very difficult, but Basil can elaborate. It will be very difficult, to the point of impossible. To your other question, the dual share structure has been approved by shareholders and has been with us for a long time. Actually, of the maybe 500 to 600 shareholder meetings that I’ve done, it almost never comes up as a concern. We represent all our shareholders and it doesn’t seem to be a major issue for most of the people who invest in our shares. On the other hand, I think our ability to be a credible investor in markets like Russia and China, it does rest, at least partially, upon the inability for people to do a hostile takeover of our company. That has been true for the entire life of our company, and it’s still true today. We have time for two more questions, any pressing ones?

A broader question, which is just what do you thinks makes Naspers different from most other companies you’ve worked for and what elements do you think it has made it most successful? Then a narrower question on education technology, and what you’ve learnt from investing in that sector?

I think there’s probably two components that I think are quite different from our group, and the one I have mentioned earlier, which is everybody in the company is an entrepreneur. People have real jobs, they run real businesses, for example, if you take our ETEL business in Romania, which of course Christina will speak about. Even though we own it, we’re strategically close. We have an exceptional founder that runs that business, who spend seven days a week, 20 hours a day, to make it into something better and we really make sure that we empower people in every job we have to run a business to success. As I said, we’re not a big company with big org structures, where people have to function in major roles. That’s not at all. Even though we’ve become big we’ve managed to avoid that and I think that’s special for us.

I think another thing that’s close to us is we spend a lot of time in aeroplanes. I travel about 80% of my time and I think the same is true for my entire team. That’s a relatively exhausting thing to do but it does teach you a whole lot about how different business models work in different places. What you can learn from that, is it applicable to other places? It allows you to see what good looks like and again, I think that’s really hard to do without being able to visit all of these companies, get deeply in with them in their operations and strategy. I think that makes us unusual.

Basil Sgourdos

The inaugural Naspers investor day was closed off by a question answer session with CEO, Bob van Dijk and the financial director, Basil Sgourdos. Here the gents are answering the questions posed by Wall Streets finest.

Education technology, again, Larry will speak more about specific businesses and why we got excited in this sector. I don’t want to steal his thunder entirely so, if you don’t mind, he’s sitting right next to you actually, and he will probably be cross with me so, if you don’t mind, I’ll actually park that one for later because Larry will address it in his presentation. Okay, all right. I think we are about done. Again, if you have further questions, the last one there. We actually will come back later as well, but go ahead.

With regards to management compensation can you tell us what you like about the current management compensation structure and what you don’t like about it? Then what investor criticisms do you think are fair versus unfair?

So, there are three things that I think are good about our com structure and I can’t help but wonder, but I think we have to do better with. We pay for performance, and that is a first principle of what we do. The second key principle is around we don’t want people to make money when our shareholders don’t make money. We can debate on whether the vehicles are ideal for it but that’s a key principle of what we do. The third principle is for us to have somebody’s compensation be tied to the business he or she actually works in. There we have quite a unique structure so, we create share appreciation rights for a business that people actually manage. For example, Laurent, who sits right in front of me, has the majority of his incentives in the success of PayU, and not in the success of the group, and we think that’s the right thing to do. I think what we can do substantially better is this clause around our compensation structure. I think our disclosure is compliant but I think there’s definitely a step-up we can do, to make it more inciteful for our shareholders.

Naspers’ first investor day was closed off with another Q&A session. This time Bob van Dijk was joined on the stage by the financial director, Basil Sgourdos – let’s listen in.

Could you talk about your capital requirements for the next few years and do you have any plans to raise new capital at all?

Yes, so there’s two questions and let me just play them back so, are capital requirements for the next few years and do we have plans to raise more capital? Maybe I’ll give the initial answer and Basil, you can correct me in everything I make, in terms of mistakes. So, we have a fully funded business plan, plus capacity for M&A. That means that we have looked out a number of years, seen what we see as requirements for what we need to do for the investments in our businesses, and in addition, we have capacity to do significant M&A. I think that’s the short answer to your question. Basil, do you have anything to add?

Yes so, we have a revolving credit facility of $2.5bn that’s undrawn on so that creates quite significant capacity. Then as we add more profitable businesses and cash flows we can add more debt. Then to your question around equity of course, at a 40% discount we wouldn’t be issuing equity.

Hi, two questions. Firstly, I get the point that if you weren’t $100bn plus company, there wouldn’t be such impressive people on the front row or a room full of people listening to you but if it’s merely a passive investment you can’t really argue that we should hold it because it’s going to make great returns otherwise everyone should sell their operating business and invest in Netflix or Tencent, or whatever. What can you say to show that you’re not a passive investor because it’s easy to think these are the guys who made a great investment, and it doesn’t go beyond that?

So, the question is around, I think our Tencent investment in particular, to what extent is that a passive or an active investment? Maybe I’ll have the first go at that so, we’ve invested in Tencent and the thesis was always around the capability of the leadership team there. So, Tencent in our opinion has probably the most exceptional leadership team of any internet company in the world. Now, we’ve been very close to that team for a long time and I think it has given us the insight and the conviction of further upside potential. I think there’s been many times, even in my 3.5 years when investors have said, we kind of think Tencent is running out of steam – shouldn’t you sell some Tencent shares? I think what we have been able to see is the further potential of that. I hope what I said earlier gives you an indication of that. Another example of where we are excited about how we work together with Tencent is our investments in places like India. In India we are investing together in Flipkart. Before that we were investing together in travel. They are a co-investor in our OLX business in India, and if we look forward we actually see significant further potential to deploy significant capital in India together, just to give you an example.

Maybe to add one or two small things. It’s the same as any other investment, Mail.ru or anywhere else, we see ideas and opportunities that we think maybe are useful for that team to consider and we bring them to the table and we say, here it is – this is what we’re doing. This is how we unpack it – we let them come and visit those businesses, see what they do and then let them form their own thesis. Similarly, Laurent mentioned that he goes and he learns a significant amount from WePay and that creates value here so, there’s lots of collaboration and cooperation.

Yes hi, JP Davids from JP Morgan. The first question for you two, and then one for Martin. So, can you talk a little bit about the internal dialogue you’ve had around providing some sort of yardstick to the market, whether it be financial targets, whether it be an IRR? I guess as an observation, investors can go straight into Delivery Hero if they like food as a good theme and you’ve got a reasonably complex set of assets so, how did you think about simplifying the message to the market, i.e., this is the trajectory over the next three years? Then a question for Martin, if I may. The technology stack that you’ve developed in OLX – can you talk about how complex that would be to replicate especially in an era of accelerating technology advancements? So, you’ve talked about it being a technology led business case. What is the possibility that that could actually be replicated, thank you?

Thanks for the question and just to paraphrase. The first question is around, are we considering giving forward guidance on what we could expect or what our shareholders could expect on IRR? Indeed, I’ll leave that for Basil to answer.

So, look, we haven’t given guidance and we’re not going to start giving guidance now and there’s a core reason for it. The business is evolving so fast it’s very hard to look six months to a year down the road, never mind five years down the road. We’re a high growth business but what we do understand is the need to take you along that journey and give you the confidence that things are on the right trajectory and what we’ve done there is we’ve broken out our e-commerce disclosures so, we’ve showed you what the key sub-segments are. We’ve picked out what the key metrics are and we want to keep those fairly consistent so that you can actually start to track how we’re delivering. Are they’re continue to grow? Are you seeing the right economics and the right margins? You can stack us up against our peers and then make a decision as to what those assets are worth and we’ll continue to do that and build that journey with you.

Martin…

Yes, then on the technology. There are two parts to this so, as I said, in plan we had the classifieds platform the technology looks quite simple or simplistic at a distance but it’s actually quite complex when you get close to it. So, what we do around content curation or the algorithms around sort order or the way we monetise or the way we provide customer support features is actually the result of many years of investments and learning. Going forward, what is critical as you referred to it again, is the idea of scale, where we benefit from our 40 markets and a thousand people in continuous advancements in technology. I think many of our direct competitors, and sort of one market companies, in a vertical and horizontal, I think they both struggle to keep up with the world. Can what we do be replicated by someone else overtime? Yes, you can never be certain it can’t but I think it will take a company like Google, or Facebook, or Amazon to do that. They, in turn, I think lack the local expertise and the local teams that we have on the ground, to build deeper solutions, of which I gave you a number of examples around payment and shipment, or instant cash for cars, or other examples that require that local footprint. That’s how I see our model from both sides.

Thanks a lot, Martin. I think one of the things that struck me from your presentation is that the ability to replicate what we’re doing in technology is getting increasingly harder over time. There’s a question there on the right, in the middle.

Yes, Larry from Gabelli Funds. I recognise that you guys have to abide by the rules in South Africa but I was wondering if perhaps you’ve considered having different accounting disclosures to some of the investors? I guess the problem that I have is that you can’t tap into the Tencent under your local rules. You’re consolidating it and I’d love to see some de-consolidated financial statements and I also would greatly appreciate quarterly. I won a battle with BSkyB several years ago and they went quarterly and it helped them a great deal. What’s the current value of Mail.ru and what’s your relationship with Yuri and what kind of value has he brought to you guys through the years?

Flag map of Russia

Three questions, and just to play them back to make sure we have them. So, the market cap of Mail.ru and our relationship with Yuri, who is no longer in Mail.ru. The question before that was around moving to quarterly reporting. The third one was around consolidating or deconsolidating financials, correct? So, I’ll start with the last and I’ll hand over the other two to Basil. The market cap of Mail.ru went up about 50% in the last year and that is something that we were actually really proud of the team that has delivered that. The two-core people in the Mail.ru team are the chairman, Dimitry, and you have Boris, who is the current CEO. What we’ve been really excited about is how Boris has taken the vibrancy and the power that the platform has in Russia and has expanded it to other verticals. Food-delivery is an excellent example. They acquired a company called Delivery Club, which is doing food-delivery at quite some scale and they are using their platform to accelerate growth even further and that’s typically the thing we are extremely excited about. I would say, really good progress on their market cap in the last year, and we’re seeing them do the right initiatives to provide further growth.

So, we actually breakout the business so, you can actually mix and match it any way you want in. If you want it all in – it’s available for you. If you want to break it out expense – it’s available for you, and we’ve actually increased the disclosure and the ability to do that. It wasn’t possible a year ago but it’s very possible now so, we actually tell you what each of the e-commerce sub-segments do. We tell you what Tencent does so, you can back it in or back it out as you please, and the data is available. So, that should be fairly easy and, also you will see in my presentation all the numbers that I’ve put up here are ex-Tencent so, we take that onboard and we’ll continue to communicate that because I think that’s where we can ride value. In terms of quarterly reporting, it hasn’t been something that has been raised very often with us. I think we’re comfortable with the half-year reporting because that allows us to then get to the businesses and make key decisions there rather than to try and produce all the numbers and getting them out, and doing that four times a year. At some point, if it does make sense, we’ll certainly look at it. Your thoughts and ideas on that I’m happy to talk to you offline and understand how you think about it and whether we should be thinking about that going forward.

Thanks, Basil.

Thank you very much for the time for the question. I guess this question goes to, as you start crystallising your investments and you think about reinvestments and share buy-backs and I guess, potentially closing the discount. When you do find yourself in a position with capital to deploy, do you ever consider your potential returns of any investment relative to what you would expect out of Tencent or do you just have individual investment hurdles, which you consider as a standalone? I guess the question goes to, potentially the hurdle rate could be wrong for investments, and if you’re ever going to close that gap of course, it becomes difficult.

Let me have the first crack at answering your question and again, Basil you can chime in. So, when we look, and we are quite diligent about it and our board demands it of us, they want us to look at the potential return on every asset we have. That includes literally every asset, and it includes Tencent as well, and over time we and the board has gotten comfortable that we think that that is an excellent return opportunity and we’ve been proven right time and time again, and that’s the way we think about that.

For the rest of the portfolio, I think you guys tell us – is 20% good? Is 23% good? We would like to believe that it is and those are the type of opportunities we want to keep chasing and to do that right we really need to be sure that we have a strong right to play. That we follow the playbook that we’re following up to now, and that you heard through so that’s where our focus is at, and we don’t want to limit ourselves to two or three opportunities. If there are more of those that come onboard, and we have a strong right to play – we’ll chase them.

Yes, thanks. I realise that in terms of the advertised endpoint we’ve reached that endpoint. Now, we’re happy to take a few more questions, if there are any, but we also want to be sensitive of your time. If there are questions, we are very happy to run late but I know that people may have other appointments that are pressing.

Thanks, it’s Chris from UBS, and it’s just a quick one. On the valuation methodology. I do appreciate the faith that you’re placing in the analyst community, with regards to valuing your assets but just wondering if you’ve given any thought to disclosing your own assessment of the NAV on some of your listed peers in Europe, for instance?

Sure, so the question is around would we be willing to disclose our own assessment of the value of our assets? The short answer is that we thought about it and we decided that we don’t want to do it but Basil, you can elaborate on that.

A couple of things, first of all, we do value every single business internally. It’s a DCF (Discount Cash Flow) driven valuation because ultimately, we’re an operator and we’re looking to generate cashflows and DCF is a big driver of it. It guilds a number and I can tell you it’s not… Well, we’re a little bit more bullish than you guys because we have a little bit more insight. The minute you start to put that number out comes a deal, people back it out. They go, but you want that price but we know the make-up and it’s actually going to destroy value for you so I think this is a good start, and lets see how we go. We’ve just started the journey. It’s the first time you’ve seen it. Let’s see how it plays out and of course we’ll learn, and improve, and develop from there.

Thanks, Basil. We have a question there on the right at the back.

I’m from Millennium. I have three questions on discount. One, can you talk about timeframe? Is there any timeframe in which you think that enough is enough and you want to close the discount? Two, is there a percentage amount? It’s at 40% now as of this morning, if it goes to 50%, is it more creative to buy-back shares versus investing in the business? Then three, can you talk about management compensation and whether that’s related to closing the discount?

Right three questions. One is there a specific timeline for reducing our discount? The second question is around, is there a level that is acceptable or not acceptable? The third question, is there a link between management compensation and closing the discount? So, let me start with the last one and actually, if you want to go deeper on that, we have our chief people officer, Aileen here, who can elaborate. The bottom line is, there is a connection so for Basil and myself, half of our long-term incentive is actually around the share price of Naspers. If the discount closes meaningfully we create value. Not only for you but for ourselves as well. The other two questions I’ll let Basil answer, as it’s his neck of the woods.

So we’re already at the level that it’s unacceptable, 40% is not acceptable right, and we understand that. We’re doing, as I laid out in my slides, a couple of things. We’re continuing to engage with you on a couple of others. The reason we’re not executing those others is we’re not convinced that they will absolutely fix the problem and we continue to work through them. So 40% is already too high and we’re on it, and we’re pushing really hard to try and address it. There is no silver bullet. If there was I would have fired it today and this meeting would have been a 30-minute meeting. You would have all said, ‘Basil, thanks but let’s move on.’ Again, if you have ideas and thoughts, and keep bringing them back, I will continue to work through them and try to see what we can execute and how we can execute but it’s not a simple thing. It is quite a complex matter.

Thanks, I think we have time for one or two more questions, I realise we are running seriously into peoples’ time.

Hi, Phillip Stewart from Old Mutual. Maybe just following on from that question that already came on. You’ve said how the discount has opened up in the last year or so and the correlation between the foreign flows and equity flows is over 90%. So thank you for the transparency and thank you for the good performance that you’ve done in all the underlying assets, and you say that you’ll continue to look at doing other things but how long do you wait? Let’s say we have foreign outflows from SA for another year. Your performance has actually gone up and let’s say the discount goes to 50%. At what point do you say, we will do something else? You say you’re engaging with us, which we appreciate, but where’s your threshold? Where do you find the point where you just can’t take it anymore?

The timing, Phillip, is not driven by whether it’s 40, or 42, or 43%. It’s driven by having something that’s really going to solve the problem and we don’t have that answer very clearly. I know you have particular views about what it will do. We’ve taken those onboard, we’ve debated them, and I can spend some time talking through them but we don’t think that those will work right now so the timing is not driven by us taking a ‘wait and see’ approach. That’s not what we’re doing. It’s really driven by us coming up with a solution that’s really going to make a sustainable impact over the long-term and, also not destroy long-term value creation. That’s what we’re trying to solve, and the minute we can solve that, we’ll execute and we’ll come back to you and tell you. I can’t tell you it now because I don’t have a definitive answer.

The final question.

I apologise if you’ve mentioned this before because it seems like an obvious solution but what’s the viability of you creating two stocks instead of one because Tencent is so dominant? Then just splitting it off like, for example, Yahoo, Alibaba, or whichever trades. Basically, de-taxed value of the underlying, which would definitely, let’s say, solve your problem.

We’ve looked at that and we don’t think it will solve the problem but we’ll continue to engage with that. So, tracking stocks or splitting stocks is not going to change the fundamental issue of first of all, those shares, those Tencent shares, will have to be listed on the JSE. They can’t be listed anywhere else because again, you run into exchange controls so ultimately now you just take this and separate them into two so it doesn’t really fix the problem and it doesn’t really solve it.

Sorry, but obviously you’d force the market to value your other assets.

Yes, the issue is not that the market is not valuing it. The issue is that we’re seeing this flow out without things flowing in and yes, there is some work to do around the value of the assets but I don’t need to go and break up the group and create ten different pieces of ways to get in. What I need to do is to actually articulate and show you the financials for the other assets, show you what the values are and what the returns are? You can see that we’ve actually started to do that over the last 1.5 years, where we’ve actually given you a lot more information so that you can actually go and ascribe real value to those assets. Then the last part to that is, we will list assets as and when the time is right, and that will allow us to crystallise value very clearly.

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