MultiChoice Group Limited (MCG) Earnings Call Transcript

Hello, and a very good morning. Welcome to MultiChoice's very first Capital Markets Day. I'm [indiscernible], and I have the pleasure of being your MC for today. Now since its listing on the JSE about 4 years ago, the MultiChoice Group has been on an exciting journey, one that has seen a battle of pandemic, form global partnerships and yet continue to deliver fantastic content and household services to more than 100 million people across 50 markets and in more than 23 million households. Now that's certainly something to be proud of. And today, we give you insight into the strategic adaptations that the business has undertaken to leverage its success to drive future growth and long-term value creation. Now MultiChoice is no longer merely a TV business. It's a digital platform that aims to unlock the potential of the economies and the people in their key markets. You'll be blown away by some of the new areas of growth and potential that will be highlighted today. KingMakers, Showmax, Moment, these are all new avenues that form part of the MultiChoice family, and you'll hear more about from the various executives that will speak to us today. But before we get into the overriding program for this morning, let's take care of some housekeeping. Now I'm sure that you've seen the agenda and noted that each session is followed by 10 minutes of questions and answers. Now we strongly encourage you to participate. So please use the chat box provided for your questions, and we will aim to answer as many as we can within the allotted time. Now we know that we may not be able to get to all of your questions over the next 3 hours. However, be assured that the Investor Relations team will respond to you directly in the upcoming weeks. Now with that out of the way, I'm rather pleased today to introduce the CEO of MultiChoice Group, Calvo Mawela, who will take us through the strategy, outline the substantial opportunity in Africa and detail just how exactly MultiChoice is pursuing new opportunities to create a world of more.

Thank you, [indiscernible]. Hello, everyone, and welcome to our very first Capital Markets Day. Since our listing on the JSE 4 years ago, we have been on an exciting journey to reposition our business for future growth and long-term value creation. As part of this process, we have refined our strategy. And today, I would like to take the opportunity to explain our thinking to you in detail. I want to begin by briefly speaking about our proud history, which has been built over almost 40 years and has led us to becoming Africa's most loved storyteller. We had more than 23 million households across 50 markets, reaching more than 100 million people on a daily basis. Our unrivaled African footprint puts us on par with our international counterparts. We have the benefit of real scale. For comparison, on a subscriber base, we are only marginally behind Canal+ and similar in size to Sky. Before we get into the details of our strategy and ambitions, I want to give you an idea of the work we have done since we unbundled from Naspers in 2019. We have taken the time as a team to critically assess our strategy for long-term value creation by identifying and analyzing new growth opportunities. Key to this has been our ability and opportunity to leverage our platform to fundamentally transform the group. Over the past 18 to 24 months, we have made progress in creating a broader ecosystem, creating a world of more, to generate meaningful future revenue streams. While we have made strides, we need to collaborate with partners to achieve our vision. When we decided to collaborate with our partners, we look for those who are best in the market, those who are global leaders in their fields. KingMakers, the Showmax agreement with Comcast and our fintech partnership called [indiscernible] are our recent transformative deals for our group. Today, we hope to bring you a sense of what the excitement is all about. What this world of more is all about. There is a reason for this excitement. Africa presents a unique and substantial opportunity. Africa is both aspirational and inspirational. There is an excitement in Africa, driven, like we are, by a desire to create a world of more. During my travels across the continent, I have witnessed the entrepreneur can do [ self-spot ] spirit that is driving the continent forward and will lead to a bigger middle class. Over the next 10 years, Africa's population is expected to grow to 1.4 billion people. This growth is more than that of India and China combined. Its working age population is forecasted to grow by more than 1/3 to 800 million workers. And more people will move to the big cities, with the urban population forecast to increase to 47%. All of this means that going forward, there will be a rapid rise in the demand for household consumer services like our business. The population growth is accompanied by higher levels of connectivity. Over the next couple of years, there is expected to be a 12% increase in the number of electrified homes, and we hope they can keep the lights on. 39% increase in mobile Internet penetration and a 27% increase in smartphone penetration. With the rising working age population and increased connectivity, spending power is expected to grow proportionally. The regional middle class is set to grow by a compound rate of over 4% per annum, with middle-class spending following suit. Led by a rise in private consumption, Africa's real GDP growth for the medium term is forecasted to be second only to Asia, presenting numerous benefits for a consumer-facing business like ours, and set to increase across our markets with an average rate of 4% forecast for the Sub-Saharan region. Given Africa's growth prospects, it is not surprising that investment into the continent is accelerating. Africa is reflecting similar dynamics to high-growth markets like India 20 years ago or China 20 years ago. The number and value of venture capital deals in Africa has risen sharply in recent years, despite the pandemic. These venture capital deals have focused on key verticals such as fintech in large markets, particularly in South Africa and Nigeria. Despite a challenging consumer environment, roughly $2.6 billion or half of the total VC investment in 2021 was spent in Nigeria and South Africa as investors tend to look through the cycle. Investments will help to improve the [ plumbing ] in African economies and solve structural issues on the continent, notably around logistics, commerce and education. I've presented some external data to demonstrate the opportunity in Africa in general, but we have our own insights that have driven our strategy. As we have seen, we have unparallel access to the African consumer, providing us with a unique vantage point and giving us invaluable forecasting capabilities. As a result of this forecasting, we can adapt our offering to consumer demand and preferences, ensuring we remain relevant to our customers. This ability is critical to our future success. Based on our consumer insight, we know that African consumers want improved reach, affordability and quality, need competitive alternatives to fibre-to-the home and personal computer environment, one tailored localized services over plug-and-play imports, and they need to solve for security, information, payment, entertainment and other critical needs. With all this in mind, our vision is to be the platform of choice for African households and to enrich their lives by delivering entertainment and relevant consumer services through technology. We are doing this by growing our core linear pay-TV business, developing and scaling our online and interactive services and by making select investments in scalable tech-based consumer services. We don't plan to do everything by ourselves. As we have demonstrated already, we are comfortable with pursuing a process of innovating, partnering and investing as appropriate. We innovate to develop products, services and business lines organically. We partner with best-in-class third parties to deliver [ value ] enhancing services to our customers together, and we invest in compelling opportunities that align with our strategic priorities. This provides us with the best opportunity to leverage our trusted brand and unmatched platform. Now let me demonstrate how we are delivering on our vision. We continue to expand our ecosystem by creating a world of more. We keep increasing the value that we offer to our customers. As consumers find themselves using ever more avenues to access content, a critical pillar for video entertainment strategy is aggregation. In the past year, we have added Disney Plus to our Explora Ultra environment. We have offered customers cost-saving bundles to add to the convenience of accessing all content in one place. We have enhanced our catch-up services with deep [ lateral ] content through the addition of Universal Plus. And we have launched dedicated linear channel for the extremely popular SuperSport Schools app. In March, we announced that we are joining forces with Comcast, NBCUniversal and Sky to drive Showmax to become the leading streaming platform on the continent. And to ensure that our viewers can access our content in a way that best match their needs, we have launched Streama and plan to launch the DStv Glass in partnership with Sky in 18 to 24 months. We are proud to be launching one of the most innovative television products and most powerful content aggregation tools globally. We have continued to expand our offering, leveraging our platform and our trusted brand to provide customers with products and services that they value. We have done this by investing and partnering with leaders in the home services, fintech and interactive entertainment verticals as well as our partnership with Comcast and Showmax that you'll hear a little bit more later. If you look at the bottom right-hand side of the graph, you will see that we have added the Namola app to our AURA app to improve our security offering. We have strengthened our connectivity offering by expanding the DStv Internet devices from [ capped ] fixed-wireless LTE to [ uncapped ] fiber, and we have expanded our fintech activities by investing in Moment, a partnership with Rapyd and General Catalyst. Moment is set to transform the payment landscape on the continent and the CEO, [indiscernible], will tell you more about this later today. And last but certainly not least, we have invested in interactive entertainment to complete our ecosystem. Our portfolio consists of SuperPicks, KingMakers and BetKing, which we're excited to launch in South Africa very soon. All of these new services and offerings are possible as a result of the power of our platform, which underpins our strategy. Our customers are central to our business, and we have a deep history of enriching lives by bringing the magic to millions of people across the continent. Over the years, we are able to scale our business to reach more than 23 million households. And with an average of 45 people per African household, we now reach well over 100 million individuals across the 50 markets that we operate in Africa. That is the power of our platform. We have scale, distribution and insights that set us apart and provide us with a competitive advantage. From this strong foundation, we have innovated and [ evolved ] to meet our customers' diverse entertainment needs with superior content, next-generation devices, OTT services and third-party subscription video-on-demand partnerships. That is why we refer to it as a platform of choice. More recently, we started leveraging our platform to build a broader ecosystem, either through our own innovations by partnering with others or investing directly in new opportunities. We have added interactive entertainment through sports betting, fintech services and some home services, all of which offer scalable tech-based consumer businesses that we believe can grow faster by leveraging the power of our platform. In time, we expect these new services to contribute meaningful revenue streams to complement our existing pay-TV business and ensure we can drive long-term growth and value creation for our shareholders. We have spent the time to ask ourselves the hard questions and analyze what really sets us apart. We realize that it is hard for a company to reinvent itself, and we know that we can be all things to all people. We also understand that pay-TV people are [ unlikely ] to run businesses in other market sectors as effectively as entrepreneurs who are native to those environments and business models. And we appreciate the need to be careful and avoid stretching ourselves our support structures and our systems in too many directions too quickly. That is why we are leveraging our unique strength as a scalable platform while partnering with best-in-class third parties to ensure that we execute strongly as a collective. On their side, our partners know that nobody can provide them with deep understanding and access to the African continent on the scale that we can. But what are our unique strengths? We have a trusted brand and solid brand equity that is a result of many, many decades of operating in our markets. We have broad distribution capabilities. We operate across 50 markets with more than 25,000 points of sale. We have tried-and-tested regionalization strategies, strong in-country execution, supported by group functions, offering best-practice solutions and we offer comprehensive digital service channels. We have strong technology foundation, especially in terms of our transmission capabilities, cybersecurity solutions through Irdeto, online delivery capabilities and distribution and pipeline [ integrations ]. We have scaled payment capabilities, represented by an expansive payment hub that already integrates well around 200 strategic payment partners across the continent. And we have deep local capabilities, which include unique customer insights and intelligence, valuable local partner relationships, local language offerings and predominantly local staff. Given our many years of operating in the continent, we also have a very good understanding of local government as well as the various regulatory and licensing regimes. In short, we know Africa better than anyone else and we have unmatched scale. We have a multipronged approach to growth in our core business. Demand is growing for both our linear and SVOD services, and we have positioned ourselves to capture this opportunity. For us, linear TV still represents an attractive growth opportunity, especially in the rest of Africa, with penetration set to increase from 42% to 47% over the next few years. Satellite currently remains the cheapest way of distributing long-form video content to a very broad segment of our markets, especially in more rural areas. A growing African linear pay-TV market is in contrast with most other markets in the world, where Linear TV is as growth and increasingly being fragmented by predominantly online products and services. On the OTT side, we are approaching an inflection point in terms of program connectivity and data pricing. We, therefore, expect penetration to double in the next few years. After almost 40 years, we have retained our overall leadership position, despite competition in our markets. And we still have an opportunity to grow our linear video business. We currently have more than 23 million subscribers across the continent, while the addressable market is estimated to amount to 58 million or 2.5x our current [ active ] base. This leaves more than 30 million households that are up for grabs, of which around 1/3 are currently accounted for by our competitors and around 2/3 represent greenfield opportunities. So how do we bridge that gap? We believe we can keep growing our linear business while we continue to bring the best content, especially in local content and sport as key differentiators. By increasing activity in our installed base, in other ways, driving up the active base of our customers by growing into underserved markets through our regionalization strategy and by continuing to offer great value proposition than anyone else. When it comes to [ streaming ] services, Africa is set to experience exponential growth. Internet penetration of the Sub-Saharan population in Africa has doubled to 40% over the past 5 years and will continue to increase over time. Connected households are focused to grow to over 600 million by 2027. The average cost of data is approaching the $1 per gig threshold, which is accepted as the point of exponential growth due to affordability. There are strong supporters for the increase of streaming services on the continent. All these positive industry dynamics have greatly influenced our recent vision to materially step up our ambitions around streaming. In March this year, we announced that we are training forces with Comcast, NBCUniversal and Sky to drive Showmax to become the leading streaming service in Africa. Launched in 2015 as one of the first streaming services in Africa, we are extremely proud of Showmax' success to date. However, given the significant opportunity, we needed a technology solution that will match our ambitions, enable us to scale as fast as the market grows. Powered by Peacock's leading global scale technology, the new Showmax entity will be 70% owned by MultiChoice and 30% owned by NBCUniversal. The new partnership will also bring some of the world's best content to streaming customers across our footprint in Sub-Saharan Africa. Yolisa and Andrea will discuss the exciting opportunity in more detail after my presentation today. So that's our core video business. But I'm sure you are wondering about our other verticals. Why and how we choose which to pursue? We follow a very clear set of criteria when considering new opportunities. Firstly, an opportunity needs to be what our customers want as enhancing the customer value proposition is fundamental to expanding our ecosystem. Secondly, the business model needs to be scalable, representing rapid growth in a sizable segment of vertical. Thirdly, there needs to be a strong technology underpin to the product or service offering. It needs to provide capital-light digital service for a market that is increasingly coming online. Fourthly, the opportunity needs to leverage our existing platform to accelerate its own scale and reach. In other words, it must benefit from access to our installed base and regional expertise as that will help the business grow faster and much larger, increasing value for everyone. Finally, and perhaps most importantly, the opportunity needs to meet our capital allocation requirements. Attractive opportunities from our perspective need to deliver strong IRRs well in excess of our 14% weighted average cost of capital and ideally above 20%, which is the huddle rate set for our performance share scheme, which is very stringent and linked to realizing shareholder value. By leveraging our platform and continental knowledge, we're able to add capital-light adjacent verticals to our ecosystem. We see opportunity to serve a broader range of consumer needs and to grow our service offering over time. To date, we have identified the following opportunities. Sports betting is an interactive entertainment [ want ], and the market opportunity in the medium term is almost equivalent to that in linear video entertainment. The investment in KingMakers was our first meaningful investment outside of pay-TV and is delivering solid growth momentum, especially in Nigeria, where it's tracking in line with our initial investment case. Fintech represents a massive opportunity, even if we were to just consider a specific subsegment like digital payment. So far, we have grown our insurance business, 2.5 million policyholders. And we have invested in the Moment, which is set to transform the African payment landscape. [indiscernible] will tell you more about Moment in this presentation today. Home services is a natural expansion of our in-home pay-TV offerings. Our Internet offerings are gaining good traction, while on-demand security and [ emergency ] services, AURA and Namola, are set to deliver growth by leveraging our customer base over time. So where to from here? By leveraging our unique competitive advantages and the power of our platform and by executing on our focus strategy, we believe we can grow into a much larger and more valuable business, where the smaller segment of today will become much more meaningful contributors to our revenue, profits and value over time. In short, by making the most of the opportunities to expand our ecosystem, we are looking to transform from a great pay-TV operator into a leading consumer tech player. We believe we are well positioned to deliver exciting growth and attractive shareholder returns over time and have a huge amount of passion for what we are doing. It has been a pleasure to welcome you to our first Capital Markets Day today. I hope that you enjoy hearing from the rest of our fantastic team as they walk you through some of important aspects of our business in more detail.

Well, thank you so much, Calvo. Really phenomenal insights that you've shared with us so far here today to gain more clarity on the metamorphosis and strategic direction of MultiChoice group.

For you as investors, we've come to an important part here today, the question-and-answer session. And Calvo is joining me, but he's not alone. He certainly accompanied by the Group CFO of MultiChoice, Tim Jacobs. Gentlemen, it's such a pleasure to have you both here this morning.

Good morning.

Good morning.

Quite a story that we're going to share regarding MultiChoice. And I guess, Calvo, you have already set the theme and the tone that the -- these various verticals we're going to explore, lots of excitement, lots of growth. But help us understand, of the verticals that you've mentioned thus far, are there any others that you'd like to pursue, going forward?

No. The vertical that we have mentioned in the strategy section are the verticals that we have decided to go for, they're exciting. They present great potential for the business, going forward. And those are the ones that we're going to execute on.

So key focus areas that have been highlighted. I'm excited to hear more about Moments, KingMakers and of course, continuing with the focus on Showmax as well as video-on-demand. And I know that typically, you wouldn't ask a parent who their favorite child is, but in this particular case, as we look and review these various verticals, do you believe that there might be 1 or 2 that will really unlock and contribute more significantly to shareholder value?

Yes. All these verticals we've chosen very carefully. And that reason behind these particular choices is that we believe very strongly that they will all be able to contribute meaningfully towards shareholder returns and deliver great value for us. Some of them might be bigger than the others, but in the main, what we are saying to you is that we have carefully looked at all these verticals, and we're excited about them because we believe very strongly that they will contribute meaningfully to the investment case.

And growth is what we want. Increased profitability is what we're also looking for. Tim, maybe this is where I can come to you just to get further insight, especially as we take a look at the macroeconomic landscape, primarily focused on South Africa, things haven't been easy. It's been difficult. Help us understand if this has led to you having to review the margins as well as growth prospects that come out of this region.

Yes. So certainly, the macroeconomic factors are difficult in South Africa at the moment, load shedding compounding that. And of course, we had to come out with the updating trading statement a couple of months back to like revise the guidance that we've given on the South African margins. Again, when we look at the South African business, as a management team, we're trying not to be overly focused on the stuff that we can't control, right? We're very aware of it. But at the same time, we try to then outperform in the parts of the business that we do control. So for example, Calvo has gone in and refreshed the management team. We've made a couple of changes there. We've got a reinvigorated team that's really looking at every opportunity, every part of the business, making sure that we leave no stone unturned and trying to make sure that in the short term, while we have the economic factors, we don't think they're going to be there forever. But while they are there in the short term, can we improve business performance and make sure that we try and make up those margins where we can over the coming months and years.

Got you. Let's talk linear TV, and this is a twofold question for the both of you, right, because that's your traditional business, content, linear TV delivery. And Calvo, perhaps for some investors, they might be concerned that as you diversify your interest into these additional verticals, does it not risk taking away your focus on linear TV generation -- income generation? And perhaps this is also a key point just to understand from your financial perspective here, Tim.

We are very clear about what we know and what we understand. And we are not taking our focus at all. And in the presentation, you will have noted that I picked up on that specific issue that we are not going to be everything to everybody. We are going to partner with the best-in-class in the segments that we believe are going to retain good -- give us good returns. In terms of KingMakers, you've seen we've taken a stake in an existing business. Fintech, we have partnered with Rapyd and General Catalyst, who are the best in class in terms of this area. They've got their own management teams, each of these new verticals that we are investing in. And we are giving them support in terms of our understanding of the African continent, the distribution that we have, regulatory and legislative understanding of the continent, that is the support that we give them for them to be able to spearhead and be able to execute, so it's not going to take our forecast from the traditional pay-TV business.

Got you. Tim, from your perspective, I guess, this just adds to the opportunities of revenue generation, right, by focusing on these increased verticals that have come on board.

Correct. I think meeting the challenge of Calvo's strategy means that the linear businesses have to fire. South Africa has to keep generating cash. Rest of Africa, we're looking to turn to breakeven this year. And then it needs to start generating funds on its own, right? So we're very focused and understand the strategic importance of making sure that the linear businesses don't wobble at a time when we're making investments in these new verticals. So we're very, very focused on making sure that these all get the appropriate level of attention.

Got you. Maybe focused on the rest of Africa, I do understand that the objectives there are to return to profitability, but currency headwinds also face a major challenge there. How are you mitigating and managing that risk?

Yes. So I suppose when we look at risk across the continent, outside of South Africa that has specific load shedding and economic issues, I think the currency in Nigeria is probably the biggest threat to our short-term performance. The parallel market rate, which is where we get money out of the Nigerian economy, is very weak at the moment. And -- but we've been able to consistently get cash out, so I suppose that's the positive side of that. The negative side is that we haven't always been able to get them out at the best rates. But having said that, again, right, that's the part of the business that we don't really have a lot of influence over, we can't control those rates. But what we can control is the ability to scale that business and make sure that we get to a significant level of profitability so that it compensates us for these losses that we're taking in the short term.

Well, Calvo and Tim, I must remind you, there's a wonderful audience of investors who are participating here today, and we've actively called on many of you to share your questions, submit your thoughts, your comments and your feedback. And that's exactly what these Q&A sessions do allow for you to have a better understanding of MultiChoice Group as well as its strategy going forward. And Tim there's a question that's actually come through here from one of our participants through the chat platform. It's directed to you. And it says here, in light of the pivot form -- into different verticals, is there a minimum shareholding target for each partnership? Second to that, are there clear governance structures in place to avoid conflicts of interest with the businesses that are being partnered with? So maybe a twofold question for the both of you here.

Okay. So let me start. So I think we've started in each business with what we have felt is a reasonable level of investment, right? So if I just go through each of them. In the Showmax business, which is a business that we owned, we have been very comfortable with our partners coming in as a 30% shareholder. So we retain 70%, and we retain the bulk of the economic benefits. But we also -- remember, that business is very closely aligned to our linear business. So these are our video businesses. They just delivered over slightly different technologies. So there, we're very comfortable having that 70% and having it within our control. In the case of KingMakers and Moment, these are slightly different businesses. These are businesses where the partners are bringing significant value to the MultiChoice ecosystem. And in these instances, we've been happy to relinquish control. So we have influence, for example, in KingMakers, but the management team there -- and we don't have control over the shareholding and the Board, but we have influence over the Board. From a governance perspective -- and sorry, just lastly then, if we look at Moment, of course, there, it's basically a 3-way partnership with General Catalyst, Rapyd and ourselves as a 26% shareholder in that business. From a governance perspective, I think this is one of the things as the listed company in most of these relationships, we try to make sure that the level of governance that is happening in these businesses is at the right levels and that we apply the same principles of governance that we do within the MultiChoice systems to these Boards and to these different investments. Obviously, we have to be cognizant of the fact that we don't control them. But because we have influence, we can make sure that we set minimum standards. We're not going to compromise our integrity by allowing governance to lapse in any of these areas of the business.

Just to add on that, I think, we're going to hear more from some of the guys that are leading these businesses. These are credible people with a great track record of running big businesses, which will give them comfort that indeed, governance issues are addressed.

Definitely. And maybe we can keep on that particular point because governance is quite a key concern and of course, will be brought to the formed, going forward. But Calvo here is a separate question, again, speaking to the partnerships that you formed. And they ask for, can you give us an update on the Sky Glass TV partnership? Any news that you're able to share here?

Yes. The teams are working very well together, and there is a lot of progress that is being made on the technical side to make sure that our platform is able to move on to the Glass platform. But of course, in this type of discussions, there's always a number of teething problems that need to be addressed ahead of time. So far, we have given a guidance that it will be in the next financial year, not this financial year. And we think the teams are on track to be able to come up with something in the timelines that we have shared. It's exciting. The Glass TV is just superior than any other TV that you have seen before, ease of use, discovery of content. So we're excited about as [indiscernible] South Africa first.

100%. We're looking forward to it. There's another question that comes back to South Africa. I guess, just to highlight how important this market is. Tim, it's addressed to you. And the question asks how meaningful has the impact of stage 4 to 6 load shedding being on your subscriber base? Is there anything you can do to better manage this? Do you think you can win these subs back if load shedding improves in 2024?

Yes, very good question. I mean, again, we see a direct correlation between the level of load shedding and the impact on our customers. Once you get into kind of stage-6 load shedding where we were for quite a bit of the second half of this last financial year, we see a very -- two direct correlations that we look at. The first one is we look at industry data, right, that is independent of us. So when we have a look at the industry as a whole, at stage 6, viewership dropped about 34%. Whereas on the DStv platform, we only dropped 12%. And the second statistic that we use is the difference between what's happening with our 90-day subscriber base and our active subscriber base at a point in time. And we are seeing a disconnect between these two, where active subscribers have gone slightly negative. And we're still seeing growth in the 90-day subscribers. What that tells us is that, in our view, although people are under economic pressure and they are choosing when -- very tactically when to come and renew their subscriptions, they still want to be on the platform. So in the 90 days, over a period of 3 months, we're seeing that, that number is a lot higher than the active day. So that means that our product is still resonating with customers. So we're still comfortable that despite the load shedding, we think customers will come back, and we've had experience of this in Africa. A number of markets, in particular, if you look at Zambia and Zimbabwe, when the drought has hit Kariba Dam and the water has dropped. They've had electricity problems, gone as electricity problems. And all of these markets tend to bounce back quite strongly once those issues are resolved.

100%. It also speaks to ongoing innovation, right? I look at me with all my devices that also speaks to the apps and the streaming platforms, which also fall under the various MultiChoice units. So solutions are being sought. Gentlemen, we will pause it there for today, but we'll certainly continue interacting with the both of you as we dig deeper into the insights that we'll hear regarding the various verticals that we'll discuss. But thank you so much for your time so far.

Thank you.

Well, of course, a reminder to you as audience participants to keep your questions coming through. There will be an opportunity for us to address them. And if we struggle to over the next 3 hours, please do be assured that the Investor Relations team will respond to you directly within the upcoming weeks.

Now that we've got some insight into the various elements of this business, let's cross to one and focus on an aspect of MultiChoice that we are quite familiar with. It's video-on-demand platform, Showmax, which was launched back in 2015. Since then, we've seen an increase in competition in this market, but that hasn't deterred MultiChoice from maintaining and pursuing ongoing success. Now up next, we'll hear from the CEO of Showmax, Yolisa Phahle, who'll give us a clearer view of Showmax 2.0 in partnership with Comcast.

Thank you [indiscernible]. And hello, everyone. It's great to be here, and I've been really looking forward to finally being able to tell you more about the exciting journey that lies ahead to Showmax. So welcome to this section of our Capital Markets Day. About 3 months ago, we announced our intention to step up our streaming ambitions and shared the news that we're joining forces with Comcast to create the leading streaming platform on the African continent. This partnership, which we've been working on for more than 2 years, will be the focus of my presentation today. Streaming has become a huge growth sector for video, not only in the developed markets, but also in the developing world. Today, there are about 1.4 billion streaming customers globally. That's 18x more than 10 years ago. And although it started in the U.S. and Europe, today, other markets account for more than half of that 1.4 billion. So historically, the large-tech companies dominated online video. But today, traditional media companies like us are also successfully staking their claim. For example, looking at market share for North America, 10 years ago, legacy media companies had a streaming market share of only 9%, but today, that number has increased to 42%. Put another way, in 2013, Netflix owned 70% of the market, but today, that number has dropped to 15%. And there is a huge opportunity for SVOD in Africa. And as MultiChoice, that opportunity is open to us. A proliferation in streaming services have made more choices available to consumers. And as a result, there has been an increase in what we call stacking. Stacking being the number of subscriptions per individual subscriber. This is reflected in the chart on the left-hand side, which shows that only 13% of streaming customers in the U.S.A. subscribed to 3 or more streaming services in 2016. But as you can see, by 2022, that number has increased to 67%. On average, people subscribe to over 4 paid video services today, a number which is forecast to increase to almost 6 by 2025. So if Showmax has an unbeatable content lineup, there's every reason for us to be one of the services people choose to subscribe to. Globally, this increase in choice has seen players significantly increase their investment in content, especially in original productions, to drive and attract subscribers. The chart on the right shows this ramp-up in content spend over the past 2 years. All of this, of course, comes at a huge cost if you're not able to either sweat or sell these assets. And so what we're seeing is that several streaming providers, Disney, for example, and more recently, Warner and HBO, seem to be recalibrating their strategy to speed up profitability. Some of the other issues impacting the industry include the need to continually improve the tech and the platform experience. The need for a data-driven personalized approach to customer management and the demand for live sports on SVOD is actually becoming the norm. This is something we've been focusing our Showmax Pro offering on. Also, ad-supported offerings are gaining traction, especially among younger viewers, who seem more amenable to [ ad-first ] disrupting their viewing, if it means a lower subscription costs. But the good news in all of this is that Africa is seen as the final frontier for SVOD growth globally. Penetration in Sub-Saharan Africa is that only 2% of households and this significantly trails the rest of the world, which has an average streaming penetration of 21%. It's this statistic that is one of the things that most excites us about the opportunity that lies ahead in our region. In addition, some favorable macro trends will further support the exponential growth opportunity. The graph on this page shows that Africa has a large and rapidly growing population, which is expected to reach more than 1.2 billion by 2027. And as Calvo mentioned in his presentation earlier, this number is set to increase further to 1.4 billion by 2030. The disposable income of people in Africa is increasing, with a GDP per capita forecast to rise to [ $3,500 ] a year in a few years from now. And critical to our streaming business, Africa is becoming increasingly connected, with up to 100 million connected households in 5 years' time, that's in addition, the almost 600 million individuals with mobile connectivity. We are a mobile continent. But it's not only broadband connectivity that's on the rise, it's also broadband affordability. This graph shows how prices for 1 gig of mobile data have been coming down over the last 4 years. And we've looked at many countries across the world, and the research shows that at a price point of USD 1 per gig, streaming takes off in big numbers. And while that number could well be a bit lower in Africa, what is clear is that our markets are ready to embrace a digital future. The streaming landscape is also changing rapidly, and global players have now turned their sights to Africa. Disney Plus launched in South Africa in May last year. Amazon is intensifying its efforts on the continent, looking to launch e-commerce services in South Africa in addition to a mobile service in South Africa and Nigeria. And Amazon is also commissioning more local content, so is Netflix. Several local players are also active in the streaming space, including Viu and some telcos. But the good news is that research shows that alongside the global players, there is an opportunity for a local player like us to lead the way with a differentiated product offering. So in line with our history of identifying trends early, MultiChoice embarked on its streaming journey in 2015 as one of Africa's first original streaming services. Today, our service is available in 50 markets across Sub-Saharan Africa. And we're proud of our achievements to date, which include being the joint highest-rated streaming app in South Africa in the Apple App Store and the highest-rated streaming app in the Google Play store. We also accept payments in more local currencies and on more payment platforms than any other streaming service in Africa. Additionally, the research is citing Showmax as a strong brand with the most local resonance. And as a result, Showmax subscriptions have also increased steadily. Over the past 2 years, we have grown the total customer base by 60% and grown the paying subscriber base by 111%. Outside of South Africa, our market is also growing very strongly off a low base. In fact, it's delivered a 75% growth over the past 4 years and reported 88% growth year-on-year in F '23. Over the last year and a bit, we've also proven the demand for sports. And Showmax Pro was able to grow its customer base by 161% over the past 12 months. This growth has been driven by our shift to a local content focus with great success. We produce high-quality pillar original content, and it has become a key differentiator of our service offering. In fact, around 80% of all acquisitions can be attributed to our Showmax original productions. Shows like Devilsdorp named Best Made for TV Documentary at the 2022 South Africa Film and Television Awards. Real Housewives of Lagos was another fantastic success. It launched in Nigeria, but it's also been making waves and broadcast internationally. Another show, Spinners, recently received a nomination at the 6th edition of Canneseries, making it the first African series to be selected in history at Canneseries. And there are many other local productions that also attracted great viewership and great subscriber numbers, like our recent romance drama called Adulting; another show, The Wife, an adaptation of a best-selling novel as well as a documentary Steinheist. So now shifting gears to talk tech. Over the years, Showmax engineers have provided innovative solutions for content downloads, adaptive bit rates and compression as well as low-end device support. We've spoken about our ability to accept payments. And we were also the first streaming service in Africa to understand the power of our mobile-only plan. We're also incredibly proud to offer the lowest data streaming option on the continent. So as you can see, we've achieved many great successes on our own. But we believe that with the right partner, someone who is as excited as we are about the prospects for streaming on the African continent, we can do so much more. And so as announced in March, we are hugely excited to have signed a deal with Comcast. Today, Comcast is one of the world's largest media and tech companies. It has made deep investments in global tech expertise and has a best-in-class platform. It also happens to be one of the largest international content producers. So combine this, without unmatched local content production capability, our impressive sports rights and our ability to sweat our content assets across not just Showmax, but across our entire pay-TV business with access to over 23 million households, this, we believe, provides a very strong foothold from which to take our entertainment business sustainably into the digital future. By joining forces with Comcast, we plan to become the leading platform on the African continent. Comcast have made a 30% investment in Showmax, thus enabling them to scale their platform's reach. And together, we'll offer first and exclusive movies, including popular franchises like the Fast and Furious, Minions, and other award-winning series like New Amsterdam and formats like the Real Housewives. We will offer more local programming in more local languages than any other player. And with our sports rights, we will have an enviable content lineup that has something for everyone. Add to that Peacock, providing a state-of-the-art a scalable platform, which is already powering other partnerships, both in the U.S. and in Europe. This platform will deliver significant benefits to Showmax. It's highly scalable, with an extremely large talent pool, which will expand our engineering capacity. We'll have access to their best-in-class tech that can be rapidly deployed. And should we need to, we can adjust or pivot to AVOD or to FAST channels. Their marketing technology is designed to help us optimize spend. It will provide an end-to-end view of the customer. From the minute they joined, we will know how they pay, when they pay, where they pay and what they watch. All of this can increase customer lifetime value through an advanced segmentation and predictive churn analytics. In fact, a great case study of a streaming partnership is SkyShowtime. The successful streaming service launched last year as a partnership between Comcast and Paramount, supported by Comcast, NBCU, Peacock. It brought together a collection of the greatest studios and storytellers from Universal Pictures, Paramount Pictures, Nickelodeon, DreamWorks Animation, Sky Studios and Peacock. And within a short space of time, it's been rolled out successfully to 22 markets across Europe. To start our partnership journey, we've structured the new Showmax entity to drive growth in the most optimal way. MultiChoice has incorporated Earth U.K. Holdings Limited, a new company that's been registered in the U.K., which will trade as Showmax and in which it holds 70% equity share. As mentioned earlier, MultiChoice transferred its existing Showmax business to Earth Co. While Comcast, through its subsidiary, NBCUniversal, injected cash for their 30% equity stake. So Earth Co. will hold a 100% interest in Showmax [ SAP TY ] Limited, which will own all the Showmax rights, assets and liabilities in South Africa and the rest of Africa. In Nigeria, however, Earth Co. will hold a 79% stake in the Nigerian operations, resulting in Comcast holding an indirect stake in MSA Limited Nigeria of 23.7%. Our Board of Directors will consist of 3 representatives of MultiChoice, with additional appointments being made in due course. The senior leadership will be based out of the U.K. and Dubai, whilst operational teams will be located in major markets with boots on the ground. Now, I should say that the agreement does not involve the broadband wireless or cable video or any other of the businesses of either Comcast or Sky, nor the linear satellite terrestrial and streaming video businesses of MultiChoice, all of which will continue to operate independently and at arm's length. MultiChoice will, however, provide ongoing business support through its local market expertise, local content production capabilities, its portfolio of general entertainment and local content as well as the sports rights and back office support. Comcast in turn will provide the licensing of both its Peacock platform and the fantastic content from NBCUniversal, Peacock and Sky. So practically, the way it will work is that Showmax will generate revenue from selling streaming services across the continent. It will incur operating expenses, all priced at arm's length, and ultimately generate a profit or a loss at the end of the year. Both MultiChoice and Comcast have committed to providing funding to Earth Co. during its investment phase in proportion to their respective shareholdings. And in time, we'll share in the same proportion in its profits. So let's look at what the picture could be in the years ahead. Through combining our efforts and because of our planned products and price offerings, we expect a step-change in customer numbers, going forward. The graph shows the acceleration in customer numbers that we anticipate going forward. And speaking to affordability and content preferences of the African customers, we actually expect to have 3x more customers than initially envisaged. Joining forces and sharing costs also allows us to ramp up our investment in local content. And this, as I've said, is our key differentiator along with sport. We expect the production of original content to increase materially over time. And in 10 years' time, we expect to produce 10x more local content than we do today. And this is what will help us grow, which means we'll also need to step-up our investment in Showmax in the short term. We expect the stand-alone entity to have a similar 3- to 5-year J curve, which is similar to its global peers. At the MultiChoice Group level, part of the investment cost will have to defrayed through the 30% minority partnership, the recovery of licensed content and service charge, which will be charged into the venture. So MultiChoice Group's investment J curve would be somewhat shorter and front-loaded in 2024 as well as the front part of 2025, mainly due to platform costs. But Tim will also provide more details in his capital allocation presentation today. And so to conclude my presentation, let me recap once more some of the key points. Africa is the final frontier for SVOD expansion, and Showmax will be one of the key drivers of our group's future growth and profits. Our partnership with Comcast provides the strategic levers to succeed, and we have set ourselves aggressive growth targets over time. We're aiming to generate revenue of more than $1 billion after 5 years. We've set ourselves a breakeven target by FY '27, and we're targeting EBITDA margins of around 25% and free cash flow margins of around 20% at scale. So in short, we are focused on becoming the leading streaming platform on the African continent. Africa is our home. It's our priority market, and we're very excited about Showmax 2.0, which will provide the easiest access to the best local content, the best sports and an unmatched slate of the world's best international programming. Thank you very much.

Well, are you not inspired? Great conversation and presentation by you, Yolisa, highlighting just exactly how Showmax remains focused on being a key leader in video streaming on the African continent. Well, I must tell you that we will be reviewing some of the amazing work that [ Yolisa ], together with the team, has been doing within that space. And of course, there's an opportunity for you to submit your questions to engage further to fully understand what this new journey of Showmax 2.0 does look like. But before we get there, let's watch a short video now from Andrea Zappia, Executive Vice President and Chief Executive Officer for New Markets and Business at Sky to give us some perspective on their view of the partnership with Showmax.

Hello, everyone. I'm really convinced that we have all the elements to win in the coming years in this critical sector for our industry. We're going to do it because together, we are putting together the elements that can create really a winning product. First of all, I think we are launching this at the right timing. The connectivity building now is becoming more affordable, and the global players are not fully deployed yet into the continent. The second reason is that together, we can put and give the consumer a wonderful content proposition. The combination of MultiChoice incredible ability to create wonderful originals -- local originals for the different countries and region of Sub-Saharan Africa, combined with the great NBC and Sky international content, will offer something unique the viewers in the continent. At the same time, the addition of the so broadly loved Premier League will attract the fans in a unique way. The third element is our capabilities. We are very proud to bring the Peacock platform, a platform that has proven to be incredibly strong and loved by consumers both in the U.S.. And these application is already with SkyShowtime, another joint venture done by Sky in Europe. And at the same time, instead, we are going to build on the great MultiChoice capability in the go-to-market in Africa, not just the incredible knowledge for the marketing operation into the region, but I was personally incredibly amazed about the work you have done on payments in the continent. It's incredible how many different payment methods you've been able to integrate and how these actually help consumers to choose the way they want to pay to access great entertainment. So these three reasons make us super confident. We are going to do a great job together and create a winner. With this project, we are also strengthening our partnership. You already know that a short time ago, we announced the launch of Glass in South Africa. Sky Glass has been and is today a terrific success in both the U.K. and in Italy, and we are very proud the MultiChoice have chosen that technology to enrich the aggregation experience for the South African consumers. So I think altogether, we can create something really strong. And I want to conclude by thanking really deeply all the people that have been working on this for such a long time with so much passion. Clearly, from our side, what I must say, your side, I learned more about your company, and we share with you the same ethos, the same values. And it's even more than the practical element, make me super confident that this partnership, the joint venture, will be successful. Thank you so much for all the work done to get to this place, and thank you in advance for the job we're going to do together to turn this into a huge success. Today is not a finish line, this is starting line. And I know together, we can drive this to really very strong success. Have a wonderful day.

Well, as we've heard the starting line to so much more success that is going to be created through this key partnership. So we've heard from Andrea, who is joining us live from London virtually to participate in today's conversation. And we've got Yolisa joining us here in studio to give us some insight into what has proven to be a very popular conversation as there's quite a number of questions that have come through. So welcome, Yoli. Really excited to have you with us. And of course, even to Andrea, who is joining us as well from London. And perhaps, Andrea, let me start off with the question that's being addressed to you from some of our investment members and community members who actually might state their concerns that "Hold on. The golden era of streaming might come to an end." So help us understand what your perspective is on this one and where there still might be opportunity in this particular collaborative effort.

Thank you Coko, and good morning to everyone. Great to join this important day and conversations with you all. So I think it's a very good question. But the reality, I'm not sure this is the right way to look at the situation we are in, in the market. It's like every other trend streaming as in its first phase of cycle with ramp-up growth. Now it's starting to behave as more mature markets, still with great margin for growth. But in a different way. Now 22 million people in the U.S. today are Peacock and the number is growing all the time. In Europe, Sky not only is keep on growing with now, but now pivoting from satellite to streaming, having launched recently 2 products with Sky glass and Sky stream. So I think there's no doubt that the long-term plans and by 2030, if you want to pick up a date, mean streaming will be the main way but people would use to watch content. And both SKY, I think overall Comcast believe that the future of streaming is reported, we said that in '22 for example, we have successfully launched in '22 my European markets, [indiscernible], as Yolisa mentioned earlier, in Paramount Global, we launched all these markets in less than 6 months, building on our platform capabilities and this allowed us to expand into new countries where we haven't been -- and we have been looking maybe over time in the past and [indiscernible] us to do this. This quickly. And here in Africa, our [indiscernible] choice will create a unique winning of [indiscernible] . So I think we have a different phase of streaming rather than an end of a golden age. Market growth is still there. And I think that Sub-Saharan Africa is a key growth opportunity for us.

Well, as you mentioned, it's an evolution, a change that's taking place, but also one that is prioritized on partnerships. And what we're seeing from members of the investment community is that they want some insight as to what this partnership will unlock. So Andrea, the first question addressed to you, what did Comcast see in MultiChoice that made it enter this particular partnership? Give us some insight there?

That's a good one. Listen, MultiChoice is, first of all, a great business. It is -- it has been for a long time, a great leader in its region. And not fundamentally, Sky and MultiChoice share a common resource, and we are really common values. So before entering the specific elements that we believe will make this joint venture, a winning one, I'd say that, that would have not happened if the two companies would have not had this common ISOs and value. So in our partnership really has tried to put together the best. And again, Yolisa mentioned this before, and we have believed into this from day 1 of the conversation we had. We think we have fundamentally great chance to win. First of all, because we are entering at the right time. The sub-Saharan market is still a better point earlier, immature. Saving is starting to grow now. Elisa mentioned earlier about the growth connectivity and decrease of connectivity cost. And the big global player has not yet fully developed here. Second, MultiChoice has unique capabilities and its capabilities, again, mentioned earlier, is around the unique content, the ability to pro commission and produce local content relevant to the local audience. And when I say local, we were amazed about discovering how much and how good the team is able to provide content not regional, it's actually local to each single country and is relevant to those audience. And then having in terms of content, the long-term partnership with the Premier League. And then in the go-to-market capabilities where we really are together, we provide, as I said earlier, our platform on top of our content -- international content. And MultiChoice has the ability to support more payment methods in more currencies than everyone fundamentally making it easier for the consumer -- so if I need to close this amongst the values we share, we share a great passion for the customers. Both companies know the customer better want to service the customer better. And I think the skills, the capabilities we both have make this joint venture unique and give us a strong chance to win.

100%. Thanks for that response. But of course, the early investors also want to hear from your perspective. And the question that has been shared here has asked, why did you choose to partner with Comcast? Given that Peacock is a much smaller platform than the likes of Netflix, Disney and Amazon. So give us some perspective here that might add to what Andrea mentioned earlier.

Yes. Well, I mean I think Andrea has covered some of the big issues. But if I could say that we are incredibly proud of our content, our local content, which we know is going to be the big differentiator for our market along with the sports, but what we were looking for was firstly a partner who was as excited actually about the opportunity. And I think we all know and we've spoken about how we're at this inflection point and that streaming will take off. There's no going back. I mean it is the future, and we will ride into the future with the right partners. So in Comcast, we found an incredible platform, a platform that has a strategy actually to syndicate. They are already providing a platform for Sky Showtime. They have like an engineering team of thousands who will continually be working to improve the capability of the platform to make it a wonderful place for the consumer to actually find our great content. So it's really about the platform. It's really about their strategy to have a platform that can service other partners sustainably. And then secondly, I think we have to come back to content. So NBCUniversal are one of the leading content producers in the world. They make fantastic programs, great series, amazing movies and these movies will now be first and exclusive on Showmax. So to give you an example, I think we've spoken about the Fast and the Furious, about Minions, even franchises like the Real Housewives of Durban or Lucus. These are formats that belong to NBCUniversal, and we will now have access -- guaranteed access to this incredible programs. So many, many reasons. And -- but I think really, we can work with Comcast. We have worked with them and they are incredibly excited about this opportunity.

[indiscernible] that you mentioned content, right, because we know that content is key, especially with regard to the partnership with Comcast. And the question that has also come through from one of our investors as Showmax seems to have quite limited international content in sub-Saharan Africa. When do you anticipate this partnership with Comcast to reflect the additional international content and some of the themes that you actually alluded to a moment ago.

Well, that's a really, really good question because I think up until this point, we were spending most of our time and effort really promoting the incredible local content because that is what brings us subscribers. When we look at the top 10 acquisition drivers for Showmax, it's our local programming. But the in detailed research that we've been doing over the last 12 months with Comcast has also shown that audiences want fantastic international programming. And now with this increased investment and with the guarantee of this content, we will be launching -- relaunching Showmax and marketing movies, marketing international series. We've also got great kids programming coming through DreamWorks, another Comcast company. So all of the questions that we're hearing about why are we not talking about more international content will be addressed, and we certainly are going to have not just great NBC Universal programming, but HBO, Warner, Sony. In fact, if you think about it, we will have international content first and exclusively on Showmax from 80% of the world's biggest international producers. So it's going to be an incredibly strong lineup, local, sports and international content. Football. So we're talking here really about the EPL. We know that is one of the biggest leagues in the world. Africa loves football. And for the first time, people will be able to have an SVOD subscription to the EPL and more details around that will be coming over the next [indiscernible]

And this ties in for another question, Lisa, that you have received from one of our investors here, which highlights the opportunities in streaming, how there's more content that will be available. But the question asked, what is the risk of Showmax cannibalizing the linear DSTV business, given there's a similarity in terms of the content offering.

Well, firstly, Africa sub-Saharan Africa is a vast, vast market. And what we do know is that in relation to penetration of pay TV in sub-Saharan Africa, particularly outside of South Africa, there is still a long, long runway ahead of us. So we're nowhere near the kind of penetration levels in Africa that we have seen historically in other parts of the world. Well, 2% of SVOD, which is very low, and we actually know that there's big growth there. But in relation to the cannibalization, we really do believe that Pay TV will still grow, particularly outside of South Africa. And then SVOD is an ancient business. So really, we're here at the start. We've got great partners. We've got a strategy and a business plan that is sustainable. And we're offering different things. It's different platforms, different content, something for everybody. And so we're quite confident that these two businesses will grow.

Sounds phenomenal and, of course, an opportunity to make sure that we are at the cutting edge of growth as well as the development of a new key sector here. But there is a question in terms of revenue streams, right, and sustainability and the contribution to profitability for the group. And Andrea, this is a question that is actually addressed to you. The question states, as supported streaming seems to be the latest strategy for streamers. Will you be following this approach?

So let me say first that what we are starting to see, and I think we're going to see more is that streaming services will adopt some of the key elements of the tool kit that drove the growth in revenues, particularly of pay-TV, and we are clearly advertising and, for example, sports, which we have already included in our launching proposition with Showmax in sub-Saharan Africa, as Elisa said, with the EPL. Advertising is another one. And the combination of two -- these two will more going to come, allow to monetize better the reach that streaming allows to achieve very quickly more than the new business models to monetize this reach faster through advertising and also segmenting the market better. Some of the players introduced actually advertising to create a lower price tier and therefore, expand also the ability for consumers to join. And some of that is together with cracking down on password sharing, again, to offer an alternative to those customers who are sharing a password before to have the service at a lower price. From our point of view, this is something which will be important. Elisa will be better than me at explaining that, but it seems that our sub-Saharan African market is not yet big enough in advertising to leverage this properly. The great thing [indiscernible] Peacock and with thousands of engineers working on it, as Elisa mentioned earlier, is that we have -- the joint venture will have this opportunity later on. And so at the right time we would be able if that is gonna be the right thing to do to access and launch a service like that.

Got you. And Andrea, this does lead to a follow-up question that we have here, especially when it comes to the sustainability revenue forecast and expectations and the question states, the streaming model. Business model seems to be generating lower returns than traditional pay-TV. So why double down now?

So listen, that is true, streaming as low as ARPU and lower margin, but also allowed to scale faster, reach quickly you [indiscernible] and we lower customer acquisition costs. And this will be, as I said earlier, the main way people will watch their favourite content going ahead. So if you want to expand your geographical reach, if you want to monetize your content better, expanding to streaming is basically critical. I would also ask, digital Sky would believe that the future is not just there. And that's why as consumers tend to use and adapt more and more apps, providing the best aggregation experience will be critical. At Sky, we launched Sky Glass first and this year SkyStream, because we think that providing that state-of-the-art experience will allow us to win over time and expand also our mind. So the combined capability of Sky and Comcast. We have a new technology so Multichoice will benefit from the launch in South Africa. I think going forward, you'll see a combination of aggregation of ops and providing the best platform be fundamental to win as well as B2C streaming solutions.

Lisa, maybe if we can come to you as a buildup on the global and international team that Andrea has said regarding the ad structures, and of course, the level of competition internationally. But of course, that the opportunity still exist. Help us understand from a local point of view. How the economics of Showmax makes sense and how Showmax has contributed to the financials essentially of MultiChoice Group in order to be a key priority and leader in terms of investment opportunity here?

Yes. I mean I think that's a good question because we are seeing globally expert operators recalibrating and relooking at their strategy. At MultiChoice, I guess we're very fortunate and that we have a Pay-TV business and we have an SVOD business. So when we acquire rights, whether it's international content or whether it's sports, or whether we're commissioning programming. We actually are able to amortize the cost of that content because we have a very sophisticated windowing strategy, which means that one business does not carry these content costs alone. And I also think it's important to realize that our market is very different. So as we say, local content is what brings us subscribers. And we are producing local content in incredibly innovative ways. We're able to really compete with coproductions, incredibly proud of big shows that we've recently completed with the BBC Studios, Fremantle International and the Studio Canal. And that way, we're really able to get like spectacular shows, but at a fraction of the cost. And then that show -- can exist on Showmax as a first and exclusive and can later find its way into pay-TV or the reverse is also true. And it is about scale essentially. This -- you need the economies of scale to make this business work. And as we've heard, Africa, sub-Saharan Africa is at the beginning of its streaming journey. It is a vast market, and we are here with a strategy which is well differentiated from our competitors and very confident that we are going to be able to build a sustainable business.

We're certainly looking forward to it, and of course, you've described it so aptly as Showmax 2.0, give us an understanding of time lines, deadlines, what we can expect in terms of launches? And as you've already highlighted, adding some color to the content variation.

So there will be a big launch. We're aiming to make sure that Showmax 2.0 is out there before the end of March 2024. But right now, we are producing content. We're acquiring content. We're thinking about the packaging and the pricing, and we can't wait to tell everybody more about it when we're ready.

I'm going to sneak one more question in, right, because investors want to know all about those cost packaging and pricing. It's a difficult macroeconomic climate. In South Africa specifically, which is one of your more mature markets versus the rest of Sub-Saharan Africa. How does that play an influence in terms of your pricing models?

So we've always said that we want to make sure that we've got something for everybody at a price point for everybody, and that remains true. We will share those details later. But equally, it is about making sure what we do is sustainable and makes business sense. Yes, I mean, the economy is tough. But I think the good thing about Showmax 2.0 is that we are investing in our markets. We're investing in our industry. We are creating jobs, and we are going to help our audiences continue to enjoy the best entertainment, the best information. And as you've said, at a price that makes sense for them as well as for our business.

100%. Yolisa and Andrea such a delight speaking to the both of you. I think there's a lot of excitement about the particular divisions that you run as you mentioned, with the SVOD literally at the cusp of being worth it, of course, changing and adapting to the current market dynamics. Thank you so much for your time today. Elisa, really appreciate it. And looking forward to Showmax 2.0. Andrea, thank you so much for your time joining us from London, sharing a great perspective on the global dynamics and of course, the key partnership that we see. Thank you again, Andrea. Thank you. Well, we shift gears now to talk about KingMakers. Yes, another vertical of the MultiChoice Group that does promise a great opportunity, not only in the South African market, but right across sub-Saharan Africa. Now when this particular partnership was first announced, of course, many key players actually questioned how sustainable this would be as it was the first move and first investment outside the traditional pay TV platform. And this garnered a lot of questions from members of our investment community. But despite that, it's performed really well since its launch. And as Calvo highlighted earlier in today's session, we're preparing for a launch in South Africa really soon. Well, let's hear from the man who's at the helm of KingMakers, the CEO of KingMakers, Kim Reid, who's up next to take us through their strategy, growth ambitions and of course, what we can anticipate.

Hello, and welcome to the first opportunity we've had to speak to you about KingMakers, a business focus on sports betting and gaming in the African market that launched them 4 years ago. The contents today will introduce us and aim to give an overview of what we believe the opportunity is in the African market, our business model, our products, our relationship with MultiChoice and of course, some financial numbers. Our vision is to create the African home of sports and gaming entertainment while contributing to the communities in which we operate. Our mission is to entertain customers by providing compelling, immersive and responsible sports betting and gaming products with world-class customer service. In essence, we're looking to expand our platform and presence in the African continent with customer focus and technology at our core while leveraging our MultiChoice relationship. Today, we generate approximately [ 1.6 billion ] in stakes and are our top 15 global sports betting property. We're operational in Nigeria and Ghana and aim to launch the South African operation towards the end of this calendar year. We operate under several brands, BetKing in Nigeria. We were launched at a SuperSport bet in South Africa and have a free-to-play offering in Ghana called SuperPix. SuperPix also operates in Nigeria and South Africa. To support our operations in addition to the people who are in country and more focused on in-country operations, we have support structures in Mauritius, London, Dubai and Malta. The support teams that are located outside of the in-country operations are focused on engineering, product, legal, compliance, finance and marketing, amongst others. Our management team has evolved over the past 4 years and are now led by a diverse talented group of dedicated executives with solid sports betting, gaming and consumer Internet experience. My background is firmly consumer Internet, having founded and built the Takealot Group over the past 13 years. You also may be aware of my previous positions with MultiChoice and Naspers over the past 23 years. Jasper, our CFO, comes from the [indiscernible] Group, while also working in financial services, travel and FMCG. Ronnie, our COO, has deep sports betting and trading and gaming experience, having been with Flutter, SkyBet and Sporting Index. Tom is a seasoned CTO, having been at William Hill and McKenzie and worked in many industries that require systems that process high-volume transactions. We have other executives who have a mix of both consumer Internet and sports betting knowledge coming from SkyBet and other similar companies. We believe there is a substantial opportunity in the African market, evidenced and driven by various factors. Our data shows that GGR growth in the African continent is faster than others in the world at approximately 17% that's on a CAGR basis. If we look at the different factors driving this growth, regulation at sometimes a moving target is largely an enabling factor. GDP growth in the continent remains strong and inset penetration largely enabled by mobile networks, and of course, smartphone penetration continues to grow. Looking at the sub-Saharan market, we see strong growth trends and predictions for both online gaming and betting with double-digit CAGR growing between 2021 and 2027. When compared to the large European markets, we also see that there appears to be room to grow the betting and gaming spend per head with many of the 2022 spends per head numbers on an African level are now similar to those in 2013 and 2017 in developed European markets. We cannot ignore the fact that there is already existing competition in African markets. Nigeria, South Africa, Kenya, Tanzania and Ghana all have existing competitors who have gained varied success. We see that companies that have a focus on building a local brand with a local flavor to the product offering or gaining the most success. Regional players are also having some success, while the global players have more limited success with some exceptions. There is a mix of retail and agency, but the future is definitely online and mobile. Today, our business model is a mixture of channels and products. The online channel will be our major focus with mobile being key. We have, however, built a strong brand and presence in Nigeria using the agency channel a physical channel with a diverse network of entrepreneurial agents that own and run physical shops, catering to the communities and their local areas. This channel will remain core to our success in Nigeria, and we will continue to refine and nurture this channel. Today, we provide both Sportsbook and virtual products online and in agency. Sportsbook products are based on live sporting events with football or soccer being the dominant sport, while virtual is a combination of virtual football matches and dog racing. We will continue to expand our product offering in the various markets with casino and other games depending on the markets and regulations. It is important to note that virtual and casino products have a lower, but predictable margin or hold percentage. But the outcome of Sportsbook is not controllable as it is a result of a real-life unpredictable event. Margins, therefore, experience short-term volatility, but average out in the long run. Understanding our income statement is fairly simple. Stakes to the amount we take from the users basing on the platform. We then get the gross gaming revenue, or GGR as we call it, which is stakes less the players winnings. We deduct bonusing, which is a marketing incentive we give to players to bet on the platform. These bonuses have different flavors and Ts and Cs and are developed by our marketing and trading departments. This then gets us to net gaming revenue, or NGR. We then deduct the variable costs that are all largely a factor of GGR and NGR that include things like agents commission, betting taxes, software fees from third-party providers and bank and payment charges, resulting in a gross profit. Gross profit less fixed overheads gets us to EBITDA, after which we deduct depreciation and amortization, interest, exchange losses and taxes to get to profit after tax. Some of the KPIs that we measure include the number of agents we have in country that have an agency network, the average wage per agent, average revenue generated by agent, the number of monthly active online users, average wage per online user and average revenue per online user. Having recently come on board and established a new management team, we undertook a review of the markets we were in, the regulatory and tax environments, the market potential and our ability to execute in the markets and decided to change the focus for now with the intent of focusing time and capital allocation on initial markets we believe have the most potential while pausing certain others. This has resulted in us pausing all operations in Kenya and Ethiopia and focusing our intention on continuing to expand our position in Nigeria, launching our South African business and continuing with our free-to-play offer in Ghana. At present, our intent is to continue with the strategy of focus and capital allocation for the next 24 months while we execute in these markets. The current short-term focus in Nigeria, South Africa and Ghana in no way dampens our ambition of expansion into additional markets, but only when we believe the market conditions are satisfactory and we're ready to do so. We will premise our expansion and execution on the key pillars of producing a superior local betting product, simple, fast and reliable user experience, a customer-first approach and then led by mass EXECUTIVE45. Brand that encourage a large sustainable base. All of this is enabled by our continued relationship and integration with the MultiChoice Group, a product and tech-led organization responsible gaming buyers with strong CSR projects and a culture-led business that employs the best people. We continue to focus on improving our products to our customers. In Nigeria, we have a comprehensive sportsbook product, a market-leading virtuous product that handles in excess of 13,000 bets a minute, and we plan to expand our product portfolio to enhance our customers' experience on a continued basis. For the South African launch, we have spent time analyzing the market and the competitors and will launch a compelling offering that competes with the best under a market-leading brand, super sports bets. We have a proven record of product improvements in Nigeria with the evolution of the BetKing product, its experience and plan to continue to do that. Our focus for both South Africa and Nigeria is to provide the customer with a stable, diverse and innovative product offering and a strong, recognizable and trusted brands. The MultiChoice Group provides us with many opportunities to leverage their strengths and existing assets while complying with any necessary regulation. Opportunities exist in many areas, leveraging the existing brands, Supersport bet is a good example of that. Using the existing databases, where legally possible to access a customer that is ready to participate on the platform at a low cost, integrating into existing content, both in broadcast and online and lastly, expanding what we have done with Super fix to date through tighter integration, much like we've seen with SkyBet and Super 6. There are opportunities, especially with existing and future digital content produced and maintained within the MultiChoice group that we can use to amplify our platform and increase conversion and customer acquisition. Many of the lessons can be learned from SkyBet used in our business. Now on to the numbers. Online active user growth has been strong with a compounded annual growth rate of 46% since 2019. We've seen a significant increase in bet subs per month, increasing from 46 million a month in 2019 to 141 million a month in 2022. This is a testament to our ability to scale the platform. Net gaming revenue has shown strong growth since 2019, with a 53% compounded annual growth rates, while stakes have shown similar trends with a CAGR of 59% over the same period. EBITDA margins were positive in 2019 and '20, but has since been marginally negative as we invest to scale the platform and teams to be able to support the expansion of the existing businesses and prepare the platform to be truly pan-African ready. I'll finish with today with a focus on staying true to our vision, which is contributing to the communities we operate in, while we build out our business. We have many plans still to execute here, but we've already executed on this in Nigeria. And you will see from this slide that many people and organizations have benefited from this to date. I'd like to thank you for taking your time to listen to our story, a story that has only just begun and 1 that has many chapters still to write. Thank you.

Many chapters still to write, right? And that's exactly what we're going to find out more about because this is certainly a very exciting division of the MultiChoice Group and of course, a new key investment. So of course, Kim joins us in studio to give us some insight into the details behind the numbers, but we brought Tim back, right, the numbers guy to give us some insight and maybe just provide some adult supervision for this conversation. But on that note, since we have you here, this has obviously been a very key deliberate acquisitive drive by MultiChoice Group to actually invest in king makers and have Kim at the helm. This is very different from just deciding to start abating an online platform independently. Help us understand the rationale behind this investment.

Well, the interesting thing is that before we decided to make the investment in King makers, we actually spend probably close to a year evaluating whether we could do this ourselves. And after a year, we started having some discussions with the KingMakers shareholders and the management team, and we realized that this just wasn't an area that we really had the skill set, the speed to market, the ability to kind of roll out a platform and really understand things like odds and how you set those, you can really be taken to the cleaners financially if you don't get these things right, and you don't have a really experienced team behind you. So having tried and having looked at that and looked at our ambition relative to the kingmakers management team's ambitions, we realized that it was actually way better for us to invest rather, and that's how we ended up making that decision.

Incredible story and of course, background to it. But I'm keen to understand there's a lot of competition in the market. You could have partnered with anyone else and also chosen to have someone else other than Kim at the helm. So help us understand the decision behind KingMakers and, of course, the partnership with them, having Kim at helm in terms of capability.

Well, I think the most important thing was apart from the financials, which worked out was do we resonate with the shareholders and with the management team. Because without that, I think Andrea mentioned it in one of the earlier Q&A, it's about the values and the ethos Do you really kind of gel with the partners that you want to work with? The only way that this partnership works is if you really make a significant effort from both sides. And that means you have to work closely together. This is only going to work as a bigger than the whole or bigger than the individual sum of the parts, if both teams are really working together and exploiting the strength from each of the different parties. So when we did that assessment, we looked at -- so Kim was a shareholder at that point, wasn't the CEO at the time, but we looked at the management team. We had long discussions with the shareholders, and we felt that we had that camaraderie. We had that connection, and we had the similar value system and vision for what a kingmakers could be on the continent. And because they're aligned closely with what we were doing in the linear business, that was something that we really resonated with.

Yes, 100%. Kim, you've got a wealth of history and background in terms of e-commerce as well as online retail in South Africa and, of course, opportunities in sub-Saharan Africa. But Help us understand the rationale behind kingmakers and how you believe it can be successful in such a tight market like South Africa?

Look, it's larger than South Africa. So South Africa is one of the opportunities that we'll execute on by the end of this year. I believe it's an exciting market. Getting into markets that are growth markets and being able to build businesses is pretty much what I enjoy and certainly, the team agrees with me and enjoys as well. So we see those aspects in this business. We believe that there's an opportunity Pan-African wise to grow a sustainable platform, which will build value for both the shareholders and kingmakers and, of course, the shareholders in MultiChoice. I think the other thing that's also very exciting for us is the fact that we have MultiChoice as a substantial shareholder, which allows us to leverage many of the assets and actually play off some of the playbooks that are in the market and I'm referencing really Sky and Sky Bet as one of those playbooks.

Got you. We will continue to deep dive into some of the questions that have come through. And in your presentation earlier, you mentioned pausing in certain African markets. And some investors do want to know what does this mean? Does it have a negative impact on the value of the business overall and of course, the strategy in terms of the rollout?

Sure. So we're an entrepreneurial business. If there's one thing that I can tell you that I learned in my time at Takealot is you consider and you reconsider your assumptions on an ongoing basis. So I came into the seats roughly in August last year, have assembled what certainly we believe is a very strong management team. And the first thing we did was we looked at the aspects of the markets, how we were competing in the markets, the regulatory environments, the tax environments, all those types of components that are important to building this business. We also looked at capital allocation and where we think the capital allocation is to be to leverage what we have and where we want to be. So that process ended up in us deciding that we're going to continue growing our Nigerian base, which is doing particularly well launch in South Africa, which we aim to do at the end of this year as well as continue our free-to-play offering in Ghana. We'll also meant, unfortunately, was we were going to close down Kenya and Ethiopia. So closed down those two markets. We've absorbed the costs. There's not much of an impact on our valuation as such, Tim can speak more to valuation than I will. But essentially, the value that lies in this business today is Nigerian based, which is performing particularly well. And again, the opportunity that lies in South Africa and elsewhere as we roll out in other parts of the continent.

Got you. And I guess speaking of the rollout in either parts of the continent that we understand that the models are very different, right? And this does be to a question, that some of our viewers actually have in terms of understanding how does the gambling business like king makers also deal with ESG issues, which are the site environment and, of course, governance issues, which remain very key for investors overall.

So ESG is always an interesting question to answer in a business like ours. And I think the way to answer that is really to look at what we're trying to achieve. So we're a mission-based company. Our mission is to provide entertainment to our customers in the form of immersive and compelling and responsible sports betting and gaming products. So responsible is a key word there. So how do we get that right? Well, we look at various systems that we monitor closely. So we monitor our customers very closely to ensure that we don't see patterns of, let's say, self abuse in things like betting frequency and amounts that they bet thresholds and that type of thing. And we'll reach out directly to customers to engage with them and make sure that they are not overstretching themselves. And in some instances, we'll actually offboard customers. It goes on to other things like we run responsible gaming adverts and promos to inform people as to be responsible on the platform. And then we also provide services like there's a service that we provide in Nigeria to a company called Gambling Aware, which is counseling to customers if they are all facing certain problems and also self-limiting service as well, whether they can actually offboard themselves.

Sounds like a significant move in the right direction in terms of maintaining levels of revenue and profitability and a strong customer base, which is an healthy customers who understand their roles and responsibilities. Another question that we have, and this one comes to monetizing, making sure that you answered Tim's questions when you're in the board room here, Kim, how are you monetizing SuperPicks?

So SuperPicks is largely a customer acquisition tool. So we've used SuperPicks and we've looked at Super 6 with Sky, how they actually use that and how they really onboarded people onto the platform who weren't necessarily used to sports betting or gaming as such. So it's a much more simple way in actually getting on to the platform. You do a simple -- it's largely around football. So there could be basically a choice of 6 games where you decide who's going to win, who's going to lose. You put that into the SuperPicks platform. Then what it does as well is it converts it into a bet slip and then that bet slip can be used on the -- one of the KingMakers platforms.

Simplified manner to actually understand how we can access the platform.

So what it actually does for us is that actually, as I said, it's our own affiliate model, and it reduces the cost of acquisition for us. So that's really the primary use of SuperPicks.

Still a lot of growth in that particular division of the business?

Look I think there's growth around. If you have a look at Africa right now in this markets. Africa is in the top 2 as far as GGR growth is concerned. So we believe that there's a substantial market and a sustainable market to address with the offering.

Another question that really focuses on the shift to online, which we know is a key enabling this particular market. The question asks, how will the shift to online impact the KingMakers business, which is predominantly an aged business, Kim? Help us understand this one?

Yes. So I guess when you look at Nigeria and if you looked a year or 2 ago, you would actually say it was predominantly an agency business, but BetKing in Nigeria was built out of agencies. So what did we do there? We started an agency network with entrepreneurial agents who have shops themselves, physical stores who are addressing customers. And that's built trust in the Betking brand in Nigeria. And that's done very well for us. Today, the business is pretty much 50-50 agency and online. The future of this product across the continent is mobile and online. There's no doubt about it. So we'll still see growth, and we'll nurture that growth in the agency base in Nigeria. But the growth will come predominantly from online. So you'll see growth in the agency model, but the online site will grow faster. When we look specifically at South Africa, we will launch an online-only proposition in South Africa because we think that's purpose fit. Online is more profitable than the agency model because there's a lot more cost that you're sharing with your agents in the Nigerian markets or in an agency model. And we don't believe that we need it in South Africa because we're launching with SuperSport Bet, which is a powerful brand, a powerful trusted brand out the gates. So we don't believe that we need to launch an agency or retail model in South Africa. Time will tell. We may pivot. We'll see how that goes.

So there's flexibility. We like that because you obviously need to see to meet the demands and the needs of the market specifically. Tim, this one is for you. And of course, this one really does reflect on the current economic crisis that we're really experiencing, not only in South Africa, but really globally. And the question asks, given the for. price paid for your investment. Is there a risk to the value of this business in the current economic climate?

Yes, I think that's a very good question firstly. I think when we look at the value of the business, we look at this over a long period of time. And the operational side of this business is actually tracking very, very well and very close to where our initial forecast were I think Kim in the business is kind of -- I think we had 97% of the original octacore payments that were built into that -- with the earn-outs for those that are not South African earn-outs that were built into the original deal. So operationally working very well. Obviously, what has changed, 2 big things because the bulk of this business is coming out of Nigeria. Parallel exchange rates are having a big impact on the valuation as well as the discount rates that we're using. We've seen interest rates going up very quickly. and risk rates have will increase quite materially over time. So we are busy working through those at the moment when we come out to the market with our financial results on the 13th of June as the MultiChoice Group we'll be sitting down and having a direct look and we'll address the issue of that valuation specifically at that time.

Got you. Kim this ties into another question that we have here, and it actually Multichoice or KingMakers considering inorganic acquisitions to accelerate growth in South Africa.

So I can speak for KingMakers. Time left to speak for MultiChoice. Look, we are open-minded. So we'll be opportunistic in the way that we operate this business. Much the same as the way we will take it. We built that through organic growth, combination of organic growth and acquisition. If there's something that looks like it's worthwhile buying, and we have the cash to do it. We may do it. This is not the I'm afraid of, we're very focused on execution, which is key.